AGREEMENT made as of the 1st day of April, 1997, by and
between RIDGE SERVICES INC. (hereinafter 'Ridge'), whose address
is 112 Truman Drive, Edison, New Jersey 08818 and TOMMY HILFIGER
U.S.A., INC. (hereinafter 'THUSA'), whose address is 18 Thatcher
Road, Dayton, New Jersey 08810.
WHEREAS, Ridge is in the business of providing all attendant
'Pick & Pack' services incidental to the movement of goods within
and without its storage facilities, and
WHEREAS, THUSA desires to have Ridge provide 'Pick & Pack'
services at THUSA's warehouse facility at 18 Thatcher Road,
Dayton, New Jersey 08810 (the 'Warehouse').
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, THUSA and Ridge agree as follows:
1. Term. This Agreement shall commence as of April 1, 1997
and shall continue for a period of six (6) months to September
30, 1997 (the 'Term'). The Term shall be automatically renewed
from month to month thereafter unless terminated by either party
on sixty (60) days written notice to the other.
2. Charges. For an annual throughput of up to 32,000,000
units, the charges (the 'Charges') for the Services described in
Paragraph 3 below shall be as follows:
(a) $0.125 per unit - Inbound
(b) $0.14 per unit - Outbound
(c) $12.75 labor rate per hour for Excluded Services
(d) $0.06 per unit for transfers
Overtime may only be charged to THUSA if the same has been
specifically authorized by THUSA in writing in each instance.
THUSA will not pay for any overtime occasioned as a result of
Ridge's inefficiencies. THUSA will pay for the excess cost only
of overtime above Ridge's regular rate (currently $6.38/hour).
3. Scope of Services. In consideration for the Charges
paid by THUSA to Ridge, Ridge agrees to promptly provide the
following services (the 'Services'):
(a) All inbound and outbound handling (including scanning)
(b) Receiving, sorting, and shelving merchandise into stock
(c) Selection by order format
(d) 100% verification process
(e) UPS processing
(f) Expediting of daily transactions by clerical personnel.
(g) Providing cartons and tape
(h) Outbound trucking to consolidators
(i) Adhering to cleanliness standards maintained by THUSA,
including proper and timely disposal of waste and restacking and
resorting of merchandise.
4. Excluded Services. The following shall specifically not
be included in the Services:
(a) Cycle Counting
(b) Affixing Bar Codes
(c) Physical Inventories
(d) All space costs
(e) Outside storage (if required)
(f) Providing pallets
5. Ridge Personnel. Ridge shall employ sufficient
personnel in order to provide a monthly average of the man-hours
described below in the performance of the Services:
JOB DESCRIPTION NO. OF HOURS PER DAY
Machine Operator/Cycle Counter 8
The hours described above shall be organized by Ridge to
provide the Services to THUSA in light of the varied ebb and flow
of merchandise receipts and shipping. Ridge shall employ
adequate staffing from 8:00 A.M. - 8:00 P.M. on weekdays and on
Saturdays as needed. Staffing in satisfaction of the
requirements of this paragraph shall not require the payment of
any overtime charges by THUSA. Ridge shall provide THUSA with a
monthly report of man-hours to be provided hereunder. Such
report shall be delivered to THUSA within ten (10) days of the
end of each month. THUSA shall have the right to audit Ridge's
records of such man-hours.
6. Quality Assurance. THUSA shall have the right to issue
and periodically update quality assurance, performance standards
and rules and regulations for Ridge's performance of this
Agreement so as to ensure customer satisfaction and efficient and
appropriate operation of the Warehouse.
7. Independent Contractor. Nothing in this Agreement is
intended nor shall be construed to create any relationship
between THUSA and Ridge other than that of independent
contractors and this Agreement shall not be deemed to constitute
THUSA and Ridge as partners, joint venturers or joint employers.
8. Employees. Neither Ridge nor the individuals it engages
to perform the services required
of Ridge hereunder are employees of THUSA; all such individuals
shall for all purposes be Ridge's employees, and Ridge shall have
the sole authority to hire, fire, direct, control, discipline,
reward, evaluate, schedule, supervise, promote, suspend and/or
terminate Ridge's employees. In addition, Ridge shall be solely
responsible for the acts of its employees, whether of commission
or omission, and for payment of all salaries, withholding tax
deductions, benefits, unemployment compensation, workers compensation
and all other charges and liabilities arising out of the
employer-employee relationship, including, without limitation,
liabilities under any civil rights laws, wage and hour laws, equal
employment opportunity acts, any union, welfare and pension
contributions and the expense of prosecuting, defending or complying
with the award in any labor arbitration proceeding.
9. Labor Disturbance. If during the term of this Agreement
there shall occur any labor disturbance involving Ridge's
employees, whether or not such disturbance is within Ridge's
control, which involves picketing of or handbilling at any THUSA
facility or a strike or boycott against THUSA or any of its
facilities, THUSA may give Ridge written notice of objection to
the labor disturbance, and if such disturbance is not wholly
discontinued within forty-eight (48) hours after Ridge's receipt
of such notice, then, at THUSA's sole option, this Agreement and
Ridge's rights hereunder shall terminate immediately upon the
giving of such notice of termination, but THUSA shall remain
liable for any amounts due to Ridge with respect to work
performed prior to such termination.
10. Notice of Loss. Ridge shall give THUSA immediate
notice of any loss or shortage of THUSA merchandise. Ridge
agrees to cooperate with all respects with any investigation
conducted by THUSA, its agents or insurance company arising from
11. Insurance. Ridge shall, at its cost, keep in force the
(a) public liability insurance for the mutual benefit of
Ridge and THUSA against claims for bodily injury, death or
property damage occurring in connection with the performance of
Ridge's obligations hereunder with limits of not less than
(b) such employment and other insurance in such reasonable
amounts against other insurable hazards which at the time are
reasonably available and commonly insured against in connection
with the performance of Ridge's obligations hereunder.
(c) all insurance shall name THUSA or its affiliate as the
case may be, as an additional insured.
(a) Ridge will indemnify THUSA and/or its affiliate for
any losses incurred in connection with the performance of Ridge's
(b) Ridge shall be liable to THUSA for merchandise shortages
and damage to the Warehouse resulting from the acts or negligence
of Ridge and its employees.
(a) Should Ridge be adjudicated bankrupt, insolvent or
placed in receivership, or should proceedings be instituted by or
against Ridge for bankruptcy, insolvency, or receivership,
agreement of composition or assignment for the benefit of
creditors, or if this Agreement should pass to another by virtue
of any court proceedings, writ of execution, levy, sale or by
operation of law, THUSA may, if it so elects, at any time
thereafter, terminate this Agreement upon giving Ridge thirty
(30) days notice in writing of its intention to terminate.
(b) In the event of a default hereunder by Ridge, THUSA may
terminate this Agreement on fifteen (15) days written notice to
Ridge. During said fifteen (15) days, Ridge shall be permitted
to cure the default.
14. Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their successors and
15. Entire Agreement; Amendment. This Agreement
constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and this Agreement may not
be amended or modified, except in a writing signed by both
16. Non-Waiver. The failure of either party to enforce at
any time any term, provision or condition of this Agreement, or
to exercise any right or option herein, shall in no way operate
as a waiver thereof, nor shall any single or partial exercise
preclude any other right or option herein; and no waiver
whatsoever shall be valid unless in writing, signed by the
waiving party, and only to the extent herein set forth.
(a) This Agreement is personal in nature, and Ridge may not
and shall not sell, transfer, lease, sublicense or assign this
Agreement or its rights and interest hereunder, or any part
hereof, by operation of law or otherwise, without the prior
written consent of THUSA, which consent may be withheld by THUSA
in its sole and absolute discretion, except that Ridge shall have
the right, upon written notice to THUSA, to assign this Agreement
to a corporation, subsidiary or affiliate under the same
direction and control as Ridge; provided, however, that in such
event Ridge agrees to guarantee the performance and obligations
of such corporation, subsidiary or affiliate under this
(b) A sale or other transfer of all or substantially all of
the assets of Ridge or a change in the control of Ridge shall be
deemed an assignment of Ridge's rights and interests under this
Agreement to which the terms and conditions of Paragraph 16(a)
above shall apply.
(c) Any transfer, by operation of law or otherwise, of
Ridge's interest in this Agreement (in whole or in part) or an
interest in Ridge (whether stock, partnership, interest or
otherwise) shall be deemed an assignment of Ridge's rights and
interest under this Agreement to which the terms and
conditions of Paragraph 17(a) above shall apply. The issuance of
shares of stock to other than the existing shareholders is deemed
to be a transfer of that stock for the purposes of this paragraph.
18. Severability. If any provision or any portion of any
provision of this Agreement shall be construed to be illegal,
invalid, or unenforceable, such shall be deemed stricken and
deleted from this Agreement to the same extent and effect as if
never incorporated herein, but all other provisions of this
Agreement and any remaining portion of any provision which is
illegal, invalid or unenforceable in part shall continue in full
force and effect.
19. Notices. All reports, approvals and notices required
or permitted to be given under this Agreement shall, unless
specifically provided otherwise in this Agreement, be deemed to
have been given if personally delivered or if mailed by certified
or registered mail, at the above indicated addresses, with a
copy, if to THUSA to: Steven R. Gursky, Esq., Gursky & Associates, P.C., 21 East 40th Street, 15th Floor, New York, New
York 10016. The parties may change their address for receipt of
notices at any time upon notice to the other party.
20. Headings. The headings of the Paragraphs of this
Agreement are for convenience only and in no way limit or affect
the terms or conditions of this Agreement.
21. Counterparts. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
22. Construction. This Agreement shall be interpreted and
construed in accordance with the laws of the State of New Jersey
with the same force and effect as if fully executed and to be
IN WITNESS WHEREOF, the parties have executed this
TOMMY HILFIGER U.S.A., INC.
By: /s/ Joel Newman
Title: Exec VP Operations
RIDGE SERVICES, INC.
By: /s/ Dom A. Telesco
GUARANTY given by TANDEM DISTRIBUTION SERVICES, INC.
('Tandem') to TOMMY HILFIGER U.S.A., INC. ('THUSA') to induce
THUSA to enter into a warehouse agreement (the 'Warehouse
Agreement') with Tandem's subsidiary RIDGE SERVICES, INC.
In consideration of the foregoing, Tandem hereby guarantees
to THUSA the prompt performance of all of Ridge's duties and
obligations under the Warehouse Agreement as if Tandem executed
said agreement in Ridge's stead.
All of Tandem's liability hereunder shall mature immediately
without notice or demand.
Tandem shall be bound by any amendments or modifications
which are agreed to by Ridge.
Dated: As of April 1, 1997 TANDEM DISTRIBUTION
By: /s/ Dom A. Telesco
Dom A. Telesco