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Exhibit 10.04
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WAREHOUSING AND SERVICE AGREEMENT
WAREHOUSE AND SERVICE AGREEMENT, dated as of September 1,
1996 (the "Agreement") between Achim Importing, Co., Inc. ("Achim")
and Dynamic International, Ltd., ("Dynamic").
W I T N E S S E T H:
WHEREAS, Achim owns and maintains a warehouse located at 58
Second Avenue, Brooklyn, New York (the "Warehouse"); and
WHEREAS, Dynamic desires to retain Achim to provide
warehousing and general administrative services for Dynamic's exercise equipment
and sports bag and luggage importation and distribution business (the
"Business"), and Achim is willing to provide such warehousing and general
services on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants contained herein, the parties hereto agree as follows:
17. General Services. Achim shall provide to Dynamic during
the term of this Agreement the services described below (the "General Services")
on a basis consistent with the type, and level of such General Services
currently being provided to the Business. Without limiting the generality of the
foregoing, the General Services shall include the following general and
administrative functions and services:
(a) assisting in the maintenance of financial and
accounting books and records of the Business;
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(b) preparation of monthly accounts receivable aging
schedules;
(c) handling of all routine collection matters with
respect to Dynamic's accounts;
(d) maintaining accounts payable and accounts
receivable ledgers (including all necessary accounting and/or paperwork for
sales discounts, chargeback and returns), fixed asset accounts; sales accounts
and inventory accounts;
(e) performing credit checks on customers as requests
for orders are received and informing Dynamic of known credit risks;
(f) providing monthly reports of selling and production
levels, inventory levels, stock status, open purchase order reports, book/ship
reports and sales analysis relating to the Business;
(g) assistance in accordance with the conduct of
Dynamic's books and records;
(h) assistance in connection with the printing and
stationery needs of the Business; and
(i) any other miscellaneous account reconciliations
and computer generated reports reasonably requested by Dynamic.
18. Availability of the General Services. The General Services
shall be furnished during normal business hours. Achim shall devote only so much
time to the General Services as it deems necessary in its sole discretion.
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19. General Services Fee. In consideration for the General
Services, Dynamic shall pay to Achim an annual fee (the "General Services Fee")
equal to the sum of the following:
(i) the percentages of Dynamic "invoiced sales" in each year
to customers and accounts located within the United States, other than with
respect to which payment is to be made by letter of credit, as set forth below:
Percentage Invoiced Sales
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4.0% less than $30,000,000
3.75% $30,000,000 to $39,999,999
3.5% $40,000,000 to $49,999,999
3.25% $50,000,000 to $59,999,999
3.0% $60,000,000 to or more plus
(ii) 1.5% of Dynamic's invoiced sales in each year to
customers and accounts located within the United States, with respect to which
payment is to be made by letter of credit; plus
(iii) 1.0% of Dynamic's invoiced sales in each year to
customers and accounts located outside the United States (irrespective of manner
of payments).
The General Services Fee shall be payable monthly within
fifteen (15) days following the date of Achim's invoice thereof. Within ninety
(90) days following the end of each year during the term hereof, Achim shall
submit to Dynamic a statement, in reasonable detail, showing the total General
Services Fee payable by Dynamic with respect to such year, less the total of all
monthly installment paid on account thereof. To the extent that the
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General Services Fee shall exceed the sum of monthly installments previously
paid for such year, the balance shall be payable by Dynamic to Achim within
thirty (30) days thereafter. To the extent that the sum of all monthly
installments previously paid for such year shall exceed the General Services Fee
for such year, Achim shall apply the excess against monthly installments
otherwise payable in respect of the excess to Dynamic within thirty (30) days
thereafter. Upon termination of this agreement, Achim shall pay to Dynamic or
Dynamic shall pay to Achim, as the case may be, within thirty (30) days, any
excess amounts theretofore paid or payable in respect of the General Services
Fee through the date of such termination.
20. Warehousing Services. Achim shall provide to Dynamic
during the term of this Agreement warehousing services for the Business,
including receiving, storing and shipping of all of Dynamic's merchandise from
the Warehouse.
21. Warehouse Fee. In consideration for the Warehouse
Services, Dynamic shall pay to Achim a monthly fee (the "Warehouse Services
Fee") equal to three (3%) percent of Dynamic's invoiced sales.
22. Term. The initial term of this Agreement is for a period
of two (2) years and shall commence on or about September 1, 1996. This
Agreement shall automatically be renewed from year to year thereafter unless
either party shall give written notice to the other at least six (6) months
prior to the commencement of any renewal term of its intention not to renew.
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23. Confidentiality. Achim agrees to accept and use all
books, records and other information relating to the Business furnished to it by
Dynamic solely for the purpose of performing the General Service and the
Warehouse Services (together the "Services") as contemplated herein. All books
and records relating to the Business shall be kept confidential and Achim shall
not intentionally and knowingly communicate such information to any third party
(except as authorized by an appropriate officer of Dynamic or otherwise as
required by law) and Achim shall use the same efforts that it uses to protect
its own confidential information to prevent inadvertent disclosure of any
information relating to the Business to any third party.
24. Illegality and Severability. If application of any one or
more of the provisions of this Agreement shall be unlawful under applicable law
and regulations, then the parties will attempt in good faith to make such
alternative arrangements as may be legally permissible and which carry out as
nearly as practicable the intent of the terms of this Agreement.
25. Relationship. Achim is an independent contractor and
nothing contained herein or done pursuant to this Agreement shall be construed
as creating a partnership, agency or joint venture. Except as may be otherwise
expressly provided in this Agreement, neither party shall become bound by any
representation, act or omission of the other party. Achim is solely responsible
for hiring, maintaining and firing of all of the employees performing the
Services and Achim expressly acknowledges that Dynamic shall have no obligation
whatsoever to any of Achim's employees.
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26. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, administrators, executors, legal representatives,
successors and permitted assignee, but neither this Agreement nor any of the
rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other party, except by
operation of law.
27. Access to Records/Termination. Dynamic and its
representatives shall have full and complete access during normal business hours
to any and all financial and accounting books and records in Achim's possession
which relate to the Business. Upon the termination of this Agreement and for a
period of one (1) year thereafter, Achim shall permit Dynamic and it's
representatives reasonable access to, and use of, Achim's computerized record
systems, subject however, to Achim's own needs, priorities and reasonable
allocation of computer availability to Achim in order to retrieve any records
relating to the Business.
28. Entire Agreement Amendment. This Agreement, when it
becomes effective, will constitute the entire agreement of the
parties hereto. No amendment or modification hereof shall be valid
or binding unless made in writing and signed by the party against
whom enforcement thereof is sought.
29. Notice. Any notice, approval, consent, or other
communication under this Agreement shall be in writing and shall be considered
given when (a) delivered personally, or (b) mailed by registered or certified
mail, or by overnight mail or courier
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service, in any case, return receipt requested, or (c) received by
telecopy with a confirming copy sent by overnight mail or courier, return
receipt requested the parties at the addresses indicated below (or at such other
address as a party may specify by notice to the other pursuant to the terms of
this Section 11. Notice given by a party's counsel, if any, shall be considered
notice given by that party.
If to Achim Importing Co., Inc.:
Achim Importing Co., Inc.
58 Second Avenue
Brooklyn, NY 11215
(718) 369-2200
(718) 369-2210
If to Dynamic International, Ltd.:
Dynamic International, Ltd.
58 Second Avenue
Brooklyn, NY 11215
(718) 369-4160
(718) 369-4167
30. Waiver. No course of dealing nor any delay on the part
of the Corporation in exercising any rights hereunder shall operate as a waiver
of any such rights. No waiver of any waiver or a waiver of any other breach or
default.
31. Binding Effect. If any clause, paragraph, section or part
of this Agreement shall be held or declared to be void, invalid or illegal, for
any reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement.
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32. Governing Law. This Agreement and, unless otherwise
provided, all amendments hereof, shall be governed, interpreted and construed in
accordance with the laws of the State of New York applicable to agreements
entered into and to be performed entirely therein, without regard to conflicts
of law and principles thereof.
33. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
IN WITNESS HEREOF, the parties hereto duly executed this
Agreement the day and year first above written.
ACHIM IMPORTING CO., INC.
By:
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DYNAMIC INTERNATIONAL, LTD.
By:
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