1
Exhibit 10(i)
WAREHOUSING AGREEMENT
THIS WAREHOUSING AGREEMENT ("Agreement") is entered into as of
___________ ____, 1997, by and between Kennametal Inc., a Pennsylvania
corporation ("Kennametal"), and J&L America, Inc., a Michigan corporation
("J&L") and a wholly-owned subsidiary of JLK Direct Distribution Inc., a
Pennsylvania corporation ("JLK") .
RECITALS
A. Kennametal owns all of the issued and outstanding Class B
Common Stock, par value $.01 per share, of JLK, and JLK is a
member of Kennametal's "affiliated group" of corporations for
federal income tax purposes.
B. JLK is effecting an initial public offering (the "JLK
Offering") of shares of Class A Common Stock, par value $.01
per share, of JLK.
C. Upon completion of the JLK Offering, JLK will cease to be a
wholly-owned subsidiary of Kennametal.
D. In connection with the consummation of the JLK Offering, J&L
desires to appoint Kennametal, and Kennametal desires to
become a warehousing agent for J&L, at the Locations (as
defined herein).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of their
mutual promises and obligations herein contained and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, in addition to the terms
defined in the Preamble and the Recitals, the following terms shall have the
following meanings, applicable to both the singular and plural forms of the
terms described:
"BASE SERVICES" means the receiving, putting away, storing, picking,
packing and shipping of the Products (as defined herein), the record
keeping and cycle counts, the facilities and the costs associated with
the operation and maintenance thereof, and such other expediting
efforts as may be requested or required to effect the transactions
contemplated herein.
"EFFECTIVE DATE" means the date of this Agreement.
"INTERCOMPANY AGREEMENTS" means collectively, (i) those certain
agreements by and between Kennametal and JLK with respect to
administrative services, product supply, tax-sharing, indemnification,
intercompany debt/investment, non-competition and corporate
opportunities, cash management and corporate matters; and (ii) those
certain agreements by and between Kennametal and J&L with respect to
leasing, shared facilities and warehousing.
2
"LOCATIONS" means the warehouses, distribution centers and/or
showrooms owned or controlled by Warehouser, listed and identified on
Attachment A hereto, as modified in writing from time to time by the
parties hereto.
"PRODUCTS" means those products delivered by Warehousee to Warehouser
for warehousing at the Locations, including, but not limited to,
cutting tools, carbide and other tool inserts, abrasives, drills,
machine tool accessories, hand tools, and other metalworking supplies.
"WAREHOUSEE" means J&L.
"WAREHOUSER" means Kennametal and its direct and indirect subsidiaries
(other than JLK and its subsidiaries, including Warehousee).
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
ARTICLE 2
TERM
2.1 TERM. The term of this Agreement shall commence on the Effective
Date and shall continue for ten (10) years, unless terminated earlier pursuant
to Section 2.2, below, or extended by the mutual agreement of the parties.
2.2 TERMINATION. (i) Either party shall have the right to terminate
this Agreement upon the occurrence of any of the following events:
(a) A material breach of this Agreement by either party that is
not cured within thirty (30) days after receipt of written
notice of such breach from the other party; or
(b) A material breach of any of the Intercompany Agreements
which is not cured within thirty (30) days after receipt of
written notice of such breach from the other party; or
(ii) Warehouser shall have the right to terminate this Agreement upon
(i) Warehouser or its affiliates owning shares representing less than a
majority of the voting power of the outstanding common stock of JLK; or (ii)
JLK owning shares representing less than a majority of the voting power of the
outstanding common stock of J&L.
ARTICLE 3
APPOINTMENT
3.1 Warehousee hereby appoints Warehouser and Warehouser or its
affiliates accepts such appointment, as warehousing agent for the Locations and
the Products. Warehouser also agrees to perform the Base Services for and on
behalf of Warehousee pursuant to the terms and conditions set forth herein.
3.2 Warehousee shall from time to time deliver to Warehouser such
quantities of the Products as Warehousee shall determine, for storage in the
Warehouser warehouses at the Locations.
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3
3.3 Warehouser shall accept, sign for, and be responsible for the
Products upon delivery to Warehouser by the carrier. Warehouser shall notify
Warehousee that the Products have been received by Warehouser at the Locations.
If requested to do so by Warehousee, Warehouser shall verify the quantity and
types of Products received against the xxxxxxx'x xxxx of lading. Warehouser
shall notify Warehousee, after receipt of Products, of any discrepancies
between the quantity received and the xxxxxxx'x xxxx of lading. Warehousee
shall be responsible for and file all claims for shortages with the carrier.
ARTICLE 4
SEGREGATION
Warehouser shall store the Products in its warehouses at the Locations
in such a manner as to keep the Products segregated, separate and distinct from
other materials or products stored in the warehouses, including other products
and materials sold by Warehouser. Warehouser shall, through the posting of
signs or otherwise, clearly identify the Products as being the property of
Warehousee.
ARTICLE 5
TITLE
Title to the Products delivered to Warehouser shall remain in
Warehousee until Warehousee transfers the title to said Products to its
customers.
ARTICLE 6
INDEMNIFICATION
6.1 WAREHOUSER. To the fullest extent permitted by law, Warehouser
shall indemnify, defend, and hold harmless Warehousee and Warehousee'
directors, officers, agents, and employees from and against all claims, losses,
liabilities, judgments, damages, and expenses (including reasonable attorney's
fees and court costs) for personal injury to or death of persons (including but
not limited to Warehousee' employees and customers), and damage to Warehousee'
property or facilities or the property of any other person or entity in any
manner arising out of or caused by either the gross negligence or intentional
misconduct of Warehouser or its employees or agents in connection with any of
the Products. If requested by Warehousee, Warehouser shall, at its sole cost
and expense, undertake the defense of Warehousee and its directors, officers,
and employees in connection with any claim or action for which they are
entitled to indemnity under this paragraph.
6.2 WAREHOUSEE. To the fullest extent permitted by law, Warehousee
shall indemnify, defend, and hold harmless Warehouser and Warehouser's
directors, officers, agents, and employees from and against all claims, losses,
liabilities, judgments, damages, and expenses (including reasonable attorney's
fees and court costs) for personal injury to or death of persons (including but
not limited to Warehouser's employees), and damage to Warehouser's property or
facilities or the property of any other person or entity in any manner arising
out of or caused by either the gross negligence or intentional misconduct of
Warehousee or its employees or agents in connection with any of the Products.
If requested by Warehouser, Warehousee shall, at its sole cost and expense,
undertake the defense of Warehouser and its directors, officers, and employees
in connection with any claim or action for which they are entitled to indemnity
under this paragraph.
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4
ARTICLE 7
LIENS
Warehouser shall keep the Products free of liens, mortgages, and
encumbrances of any kind while the Products are in Warehouser's possession.
ARTICLE 8
COSTS
Warehouser shall assume and pay all costs and expenses incurred in the
performance of this Agreement, including but not limited to the costs of
warehousing the Products, plus other costs which are the specific obligation of
Warehouser pursuant to this Agreement.
ARTICLE 9
SHIPMENT
When Warehousee directs, Warehouser shall pick, pack and ship such
quantities of the Products of Warehousee as Warehousee shall direct. Unless
otherwise directed by Warehousee, shipment of the Products shall be by carriers
selected by Warehouser. Warehousee shall bear all expenses of shipping the
Products to the Locations and from the Locations. Warehouser shall forward to
Warehousee reports indicating the quantity of each of the Products shipped from
the Locations daily.
ARTICLE 10
COMPENSATION
As compensation for the performance of the Base Services, Warehousee
shall pay to Warehouser a charge based upon an allocation of costs (including
overhead) to be agreed to by the parties after taking into account the
Location, for each of the Products for which the Base Services were performed.
Warehouser shall provide Warehousee with a monthly invoice indicating the total
of all charges and shipping expenses incurred by Warehouser on behalf of
Warehousee. The invoice will be payable by check, wire transfer, intercompany
netting or by such other method(s) agreed to by the parties, within fifteen
(15) working days after the receipt thereof by Warehousee.
ARTICLE 11
RETURNS
The return of Products accepted by Warehouser shall be in accordance
with the guidelines, policies and procedures of Warehousee, all of which shall
have been given to or otherwise communicated to Warehouser.
ARTICLE 12
CYCLE COUNTS AND RECORDS
12.1 Warehouser shall perform cycle counts in accordance with the
policies, procedures and guidelines of Warehousee. Warehouser shall keep
written records of: (a) the results of said cycle counts; (b) the amount of
Products received by it at the Locations; (c) the amount of Products on hand at
the Locations, from time to time; and (d) the amount of Products shipped from
the Locations. Warehouser shall maintain records in
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5
sufficient detail to record the type and quantity of Products, the date of
receipt and shipment and the carrier, including but not limited to all
receipts, bills of lading or other shipping documents issued to it by carriers
and all written directions for shipment.
12.1 Warehousee shall, upon reasonable notice to Warehouser, have the
right during Warehouser's usual business hours to audit, examine and make
copies of all of Warehouser's records as the same relate to the warehousing of
the Products and the providing of the Base Services. Warehouser shall provide
to Warehousee monthly a written summary of the Products received, on hand and
shipped by Warehouser during the previous month.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Pennsylvania without regard to principles of
conflicts of laws of any jurisdiction.
13.2 NOTICES. Any notice permitted or required by this Agreement shall
be deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
IF TO WAREHOUSER: Kennametal Inc.
Xxxxx Xxxxx 000 Xxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000
Attn: ______________________
Fax No.: ___________________
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6
IF TO WAREHOUSEE: J&L America, Inc.
Livonia Executive Park
00000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
13.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together
shall constitute one and the same instrument.
13.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, superseding all prior oral
and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties.
13.5 AMENDMENTS. This Agreement (or the Attachments) may be changed,
amended, modified, or rescinded only by an instrument in writing signed by the
party against which enforcement of such change, amendment, modification or
rescission is sought.
13.6 WAIVERS. No waiver by any party of any condition, or breach of
any provision of this Agreement, in any one or more instances, shall be deemed
to be or construed as a waiver of any other condition or of the breach of any
other provision of this Agreement.
13.7 RELATIONSHIP. Nothing in this Agreement shall be deemed to create
a partnership, joint venture or agency relationship between the parties. Both
parties are independent contractors and neither party is to be considered the
agent or legal representative of the other for any purpose whatsoever.
13.8 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the parties and their respective successors and assigns, except
that no obligation under this Agreement may be delegated, nor may this
Agreement be assigned by either party, without the prior written consent of the
other party. Any such purported assignment of this Agreement by either party
without the prior written consent of the other party shall be void and without
effect.
13.9 THIRD PARTY BENEFICIARIES. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than
the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
KENNAMETAL INC. J&L AMERICA, INC.
By __________________________________ By _______________________________
Name ________________________________ Name _____________________________
Title _______________________________ Title ____________________________
7
ATTACHMENT A
(THE LOCATIONS)
8
WAREHOUSING AGREEMENT
THIS WAREHOUSING AGREEMENT ("Agreement") is entered into as of
_____________ ____, 1997, by and between J&L America, Inc., a Michigan
corporation ("J&L"), and a wholly owned subsidiary of JLK Direct Distribution
Inc., a Pennsylvania corporation ("JLK"), and Kennametal Inc., a Pennsylvania
corporation ("Kennametal").
RECITALS
A. Kennametal owns all of the issued and outstanding Class B
Common Stock, par value $.01 per share, of JLK, and JLK is a
member of Kennametal's "affiliated group" of corporations for
federal income tax purposes.
B. JLK is effecting an initial public offering (the "JLK
Offering") of shares of Class A Common Stock, par value $.01
per share, of JLK.
C. Upon completion of the JLK Offering, JLK will cease to be a
wholly-owned subsidiary of Kennametal.
D. In connection with the consummation of the JLK Offering,
Kennametal desires to appoint J&L, and J&L desires to become
a warehousing agent for Kennametal, at the Locations (as
defined herein).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of their
mutual promises and obligations herein contained and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, in addition to the terms
defined in the Preamble and the Recitals, the following terms shall have the
following meanings, applicable to both the singular and plural forms of the
terms described:
"BASE SERVICES" means the receiving, putting away, storing, picking,
packing and shipping of the Products (as defined herein), the record keeping
and cycle counts, the facilities and the costs associated with the operation
and maintenance thereof, and such other expediting efforts as may be requested
or required to effect the transactions contemplated herein.
"EFFECTIVE DATE" means the date of this Agreement.
"INTERCOMPANY AGREEMENTS" means collectively, (i) those certain
agreements by and between Kennametal and JLK with respect to administrative
services, product supply, tax-sharing, indemnification, intercompany
debt/investment, non-competition and corporate opportunities, cash management
and corporate matters; and (ii) those certain agreements by and between
Kennametal and J&L with respect to leasing, shared facilities and warehousing.
9
"LOCATIONS" means the warehouses, distribution centers and/or
showrooms owned or controlled by Warehouser, listed and identified on
Attachment A hereto, as modified in writing from time to time by the parties
hereto.
"PRODUCTS" means those products delivered by Warehousee to Warehouser
for warehousing at the Locations, including, but not limited to, cutting tools,
carbide and other tool inserts, abrasives, drills, machine tool accessories,
hand tools, and other metalworking supplies.
"WAREHOUSEE" means Kennametal and its direct and indirect subsidiaries
(excluding JLK and its subsidiaries).
"WAREHOUSER" means J&L.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
ARTICLE 2
TERM
2.1 TERM. The term of this Agreement shall commence on the Effective
Date and shall continue for ten (10) years, unless terminated earlier pursuant
to Section 2.2, below, or extended by the mutual agreement of the parties.
2.2 TERMINATION. (i) Either party shall have the right to terminate
this Agreement upon the occurrence of any of the following events:
(a) A material breach of this Agreement by either party that is
not cured within thirty (30) days after receipt of written
notice of such breach from the other party; or
(b) A material breach of any of the Intercompany Agreements
which is not cured within thirty (30) days after receipt of
written notice of such breach from the other party; or
(ii) Warehousee shall have the right to terminate this Agreement upon
(i) Warehousee or its affiliates owning shares representing less than a
majority of the voting power of the outstanding common stock of JLK; or (ii)
JLK owning shares representing less than a majority of the voting power of the
outstanding common stock of J&L.
ARTICLE 3
APPOINTMENT
3.1 Warehousee hereby appoints Warehouser and Warehouser accepts such
appointment, as warehousing agent for the Locations and the Products.
Warehouser also agrees to perform the Base Services for and on behalf of
Warehousee pursuant to the terms and conditions set forth herein.
3.2 Warehousee shall from time to time deliver to Warehouser such
quantities of the Products as Warehousee shall determine, for storage in the
Warehouser warehouses at the Locations.
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10
3.3 Warehouser shall accept, sign for, and be responsible for the
Products upon delivery to Warehouser by the carrier. Warehouser shall notify
Warehousee that the Products have been received by Warehouser at the Locations.
If requested to do so by Warehousee, Warehouser shall verify the quantity and
types of Products received against the xxxxxxx'x xxxx of lading. Warehouser
shall notify Warehousee, after receipt of Products, of any discrepancies
between the quantity received and the xxxxxxx'x xxxx of lading. Warehousee
shall be responsible for and file all claims for shortages with the carrier.
ARTICLE 4
SEGREGATION
Warehouser shall store the Products in its warehouses at the Locations
in such a manner as to keep the Products segregated, separate and distinct from
other materials or products stored in the warehouses, including other products
and materials sold by Warehouser. Warehouser shall, through the posting of
signs or otherwise, clearly identify the Products as being the property of
Warehousee.
ARTICLE 5
TITLE
Title to the Products delivered to Warehouser shall remain in
Warehousee until Warehousee transfers the title to said Products to its
customers.
ARTICLE 6
INDEMNIFICATION
6.1 WAREHOUSER. To the fullest extent permitted by law, Warehouser
shall indemnify, defend, and hold harmless Warehousee and Warehousee'
directors, officers, agents, and employees from and against all claims, losses,
liabilities, judgments, damages, and expenses (including reasonable attorney's
fees and court costs) for personal injury to or death of persons (including but
not limited to Warehousee' employees and customers), and damage to Warehousee'
property or facilities or the property of any other person or entity in any
manner arising out of or caused by either the gross negligence or intentional
misconduct of Warehouser or its employees or agents in connection with any of
the Products. If requested by Warehousee, Warehouser shall, at its sole cost
and expense, undertake the defense of Warehousee and its directors, officers,
and employees in connection with any claim or action for which they are
entitled to indemnity under this paragraph.
6.2 WAREHOUSEE. To the fullest extent permitted by law, Warehousee
shall indemnify, defend, and hold harmless Warehouser and Warehouser's
directors, officers, agents, and employees from and against all claims, losses,
liabilities, judgments, damages, and expenses (including reasonable attorney's
fees and court costs) for personal injury to or death of persons (including but
not limited to Warehouser's employees), and damage to Warehouser's property or
facilities or the property of any other person or entity in any manner arising
out of or caused by either the gross negligence or intentional misconduct of
Warehousee or its employees or agents in connection with any of the Products.
If requested by Warehouser, Warehousee shall, at its sole cost and expense,
undertake the defense of Warehouser and its directors, officers, and employees
in connection with any claim or action for which they are entitled to indemnity
under this paragraph.
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ARTICLE 7
LIENS
Warehouser shall keep the Products free of liens, mortgages, and
encumbrances of any kind while the Products are in Warehouser's possession.
ARTICLE 8
COSTS
Warehouser shall assume and pay all costs and expenses incurred in the
performance of this Agreement, including but not limited to the costs of
warehousing the Products, plus other costs which are the specific obligation of
Warehouser pursuant to this Agreement.
ARTICLE 9
SHIPMENT
When Warehousee directs, Warehouser shall pick, pack and ship such
quantities of the Products of Warehousee as Warehousee shall direct. Unless
otherwise directed by Warehousee, shipment of the Products shall be by carriers
selected by Warehouser. Warehousee shall bear all expenses of shipping the
Products to the Locations and from the Locations. Warehouser shall forward to
Warehousee reports indicating the quantity of each of the Products shipped from
the Locations daily.
ARTICLE 10
COMPENSATION
As compensation for the performance of the Base Services, Warehousee
shall pay to Warehouser a charge based upon an allocation of costs (including
overhead) to be agreed to by the parties after taking into account the
Location, for each of the Products for which the Base Services were performed.
Warehouser shall provide Warehousee with a monthly invoice indicating the total
of all charges and shipping expenses incurred by Warehouser on behalf of
Warehousee. The invoice will be payable by check, wire transfer, intercompany
netting or by such other method(s) agreed to by the parties, within fifteen
(15) working days after the receipt thereof by Warehousee.
ARTICLE 11
RETURNS
The return of Products accepted by Warehouser shall be in accordance
with the guidelines, policies and procedures of Warehousee, all of which shall
have been given to or otherwise communicated to Warehouser.
ARTICLE 12
CYCLE COUNTS AND RECORDS
12.1 Warehouser shall perform cycle counts in accordance with the
policies, procedures and guidelines of Warehousee. Warehouser shall keep
written records of: (a) the results of said cycle counts; (b) the amount of
Products received by it at the Locations; (c) the amount of Products on hand at
the Locations, from time to time; and (d) the amount of Products shipped from
the Locations. Warehouser shall maintain records in
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12
sufficient detail to record the type and quantity of Products, the date of
receipt and shipment and the carrier, including but not limited to all
receipts, bills of lading or other shipping documents issued to it by carriers
and all written directions for shipment.
12.2 Warehousee shall, upon reasonable notice to Warehouser, have the
right during Warehouser's usual business hours to audit, examine and make
copies of all of Warehouser's records as the same relate to the warehousing of
the Products and the providing of the Base Services. Warehouser shall provide
to Warehousee monthly a written summary of the Products received, on hand and
shipped by Warehouser during the previous month.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Pennsylvania without regard to principles of
conflicts of laws of any jurisdiction.
13.2 NOTICES. Any notice permitted or required by this Agreement shall
be deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
IF TO WAREHOUSER: J&L America, Inc.
Livonia Executive Park
00000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
IF TO WAREHOUSEE: Kennametal Inc.
State Xxxxx 000 Xxxxx
X. X. Xxx 000
Xxxxxxx, XX 00000
Attn:
Fax No.:
13.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument.
13.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, superseding all prior oral
and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties.
13.5 AMENDMENTS. This Agreement (or the Attachments) may be changed,
amended, modified, or rescinded only by an instrument in writing signed by the
party against which enforcement of such change, amendment, modification or
rescission is sought.
13.6 WAIVERS. No waiver by any party of any condition, or breach of
any provision of this Agreement, in any one or more instances, shall be deemed
to be or construed as a waiver of any other condition or of the breach of any
other provision of this Agreement.
13.7 RELATIONSHIP. Nothing in this Agreement shall be deemed to create
a partnership, joint venture or agency relationship between the parties. Both
parties are independent contractors and neither party is to be considered the
agent or legal representative of the other for any purpose whatsoever.
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13
13.8 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the parties and their respective successors and assigns, except
that no obligation under this Agreement may be delegated, nor may this
Agreement be assigned by either party, without the prior written consent of the
other party. Any such purported assignment of this Agreement by either party
without the prior written consent of the other party shall be void and without
effect.
13.9 THIRD PARTY BENEFICIARIES. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than
the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
KENNAMETAL INC. J&L AMERICA, INC.
By ___________________________________ By __________________________________
Name _________________________________ Name ________________________________
Title ________________________________ Title _______________________________
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14
ATTACHMENT A
(THE LOCATIONS)
