EXHIBIT NO. 10.4
SALES AGREEMENT BETWEEN THE COMPANY
AND MANNESMANN DEMATIC RAPISTAN CORPORATION,
DATED AUGUST 21, 1998
The Children's Place
Proposal Number 141110
Revision 01
July 17, 1998
SALES AGREEMENT
This Sales Agreement, hereinafter called "Agreement," made by and between THE
CHILDREN'S PLACE, hereinafter called "PURCHASER," and Mannesmann Dematic
Rapistan Corp., 507 Plymouth Avenue, N.E., Grand Rapids, Michigan, 49505,
hereinafter called "Rapistan Systems," constitutes Agreement of the parties as
follows:
1. Rapistan Systems agrees to sell to PURCHASER and PURCHASER agrees to
purchase from Rapistan Systems, the equipment and any services described
in Rapistan Systems Proposal No. 141110 - Rev. 01, dated July 17, 1998,
Pages 1 through 108, for the price set forth in the Proposal and on the
terms and conditions of Exhibit A.
2. This Agreement constitutes the entire agreement between the parties and no
oral or other representation shall prevail. Any changes, modifications, or
additions to this Agreement are binding and enforceable only if made in
writing and signed by both parties.
3. Including Rapistan project #141110-Addendum 01 dated August 19, 1998
revised page 105, Project #141110-Rev 02 and revised schedule-Rev 02 dated
August 14, 1998.
Approved and Executed By:
THE CHILDREN'S PLACE MANNESMANN DEMATIC RAPISTAN CORP.
/s/ Stan Silver Wiliam Ostermeyer
Signature Signature
President and COO August 21, 1998
Title Title District Sales Manager
August 21, 1998 August 21, 1998
Date Date
The Children's Place
Proposal Number 141110
Revision 2
August 19, 1998
PAYMENT TERMS
Rapistan Systems agrees to submit invoices, and PURCHASER agrees to pay invoices
in accordance with the invoice and payment schedule shown below. All payments
shall be made at the address indicated on Rapistan Systems invoice.
A late payment charge of one one-hundredths (.01) of one percent per day (3.60%
per annum, based upon a 360-day year) will be added to any amount not received
by Rapistan Systems on or before the invoice payment date indicated on the
payment schedule. Where this rate exceeds a maximum rate permitted by applicable
law, the permissible rate will apply.
If this Agreement provides for Rapistan Systems to install the Equipment, the
final invoice, per the invoice and payment schedule, may be held as retainer.
PURCHASER will pay the retainer amount within 60 days after Rapistan Systems
completion of Installation. However, should there be a dispute about the
completion of the Installation, then PURCHASER shall inform Rapistan Systems of
any claimed defects in the Equipment and the amount of any retainer necessary to
correct claimed defects will be mutually determined. PURCHASER will then pay the
final invoice less the determined amount. PURCHASER will pay the remaining
retainer upon correction by Rapistan Systems of any defects in the Equipment as
mutually determined.
*DATE INVOICE *DATE PAYMENT
RECEIVED BY RECEIVED BY
PURCHASER INVOICE VALUE RAPISTAN SYSTEMS
- --------- ------------- ----------------
Down Payment (With P.O.) $464,113.00 With Order
Month 1 266,089.00 Net 30 Days
Month 2 210,240.00 Net 30 Days
Month 3 206,621.00 Net 30 Days
Month 4 200,368.00 Net 30 Days
Month 5 144,266.00 Net 30 Days
Month 6 179,109.00 Net 30 Days
Retainer (Installation Complete) 185,645.00 Upon Receipt
------------
TOTAL $1,856,451.00 Base Bid
*Invoices and payments will be forwarded to provide for receipt by the
appropriate party on or before the date shown.
DELIVERY AND SHIPPING TERMS
Delivery and shipping terms for the Equipment shall be freight collect,
third-party billing.
F.O.B Origin, Grand Rapids, Michigan, Mississauga, Ontario, Canada.
August 19, 1998
Mr. Sal Pepitone
The Children's Place
1 Dodge Drive
West Caldwell, NJ 07006
RAPISTAN SYSTEMS PROJECT NO. 141110 - ADDENDUM 01
SECAUCUS, NJ DC CONVEYOR SYSTEM
Dear Sal:
This Addendum reflects the system to be installed at your new DC in Secaucus,
NJ per drawing No. 141110-Q310 - Rev. B.
The following cost summary indicates all options and changes to the original
base system:
Original Base Bid..........................................$1,787,328.00
Eliminate Dual Induct - Implement
Single Line Induct............................Deduct.......(154,717.00)
Option 'A'......................................Add...........283,051.00
Add Belt Merge..................................Add............25,894.00
Eliminate One (1) Receiving Line................Deduct.......(143,980.00)
Provide Scan/Label on Full Case Line............Add............56,981.00
Combine QC and No-Read Line ....................Deduct........(21,893.00)
Add One Trailer Loader..........................Add............23,787.00
TOTAL SYSTEM...................................$1,856,451.00
Above pricing excludes freight and taxes.
RAPISTAN SYSTEMS PROJECT NO. 141110 - ADDENDUM 01
SECAUCUS, NJ DC CONVEYOR SYSTEM
August 19, 1998
Page 2
The following revised payment schedule reflects the changes you requested:
*DATE INVOICE *DATE PAYMENT
RECEIVED BY RECEIVED BY
PURCHASER INVOICE VALUE RAPISTAN SYSTEMS
- --------- ------------- ----------------
Down Payment (With P.O.) $464,113.00 With Order
Month 1 268,921.00 Net 30 Days
Month 2 240,218.00 Net 30 Days
Month 3 236,710.00 Net 30 Days
Month 4 230,860.00 Net 30 Days
Month 5 195,594.00 Net 30 Days
Month 6 127,212.00 Net 30 Days
Retainer (Installation Complete) 92,823.00 Upon Receipt
------------
TOTAL $1,856,451.00
We have also provided responses to your contractual questions:
1. Both hardware and software warranty will begin upon beneficial use of the
system.
2. Specifically, regarding computer hardware, the warranty (from manufacturer)
begins when we receive the equipment at our shop. We will define this to be
at most one (1) month prior to shipment to your facility.
3. Payment terms have been changed to reflect your request. We will also extend
the date payment received to net 30 days.
We have also attached a revised composite cost summary sheet. If you have any
questions, please call me.
Very truly yours,
/s/ William M. Ostermeyer
William M. Ostermeyer
District Sales Manager
Attachments
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EXHIBIT A
GENERAL TERMS AND CONDITIONS
1. TAXES: Unless otherwise indicated, the price does not include any sales, use,
excise, or similar taxes, and Purchaser shall be responsible for all such taxes,
whether or not invoiced by Mannesmann Dematic Rapistan Corp. (hereinafter
"Rapistan Systems"). If taxes are included as part of the price and the rate or
base of the tax is increased or decreased, Purchaser will pay any increased
taxes, and Rapistan Systems will give credit for any tax decrease. Absent
written agreement to the contrary, Rapistan Systems will pay the tax and be
reimbursed by the Purchaser.
In the event Purchaser is exempt from such taxes or should Purchaser elect to
pay such taxes directly to the taxing authority, then Purchaser will provide
Rapistan Systems with a valid tax exemption certificate or similar document
satisfactory in form to Rapistan Systems.
2. WARRANTY: Rapistan Systems warrants that goods sold by Rapistan Systems
will be free from defects in material and workmanship for a period of one
year from the date of installation or two thousand hours of operation,
whichever occurs first. Where installation of the equipment is by someone
other than Rapistan Systems, the one year warranty period will commence
with shipment of the equipment. Rapistan Systems' obligation under this
warranty is limited to repairing or replacing, at Rapistan Systems'
option, F.O.B. manufacturing plant, any part of the goods found to be
defective within the warranty period. This obligation is conditioned upon
receipt by Rapistan Systems of prompt written notice of the claimed
defect, including a description of the defect and its discovery, and the
opportunity for Rapistan Systems to inspect the goods in the purchaser's
facility. This obligation does not include costs of labor or other charges
incurred in removing or reinstalling part, and does not apply to goods
damaged by misuse, neglect or accident or to goods which have been
improperly applied, installed, adjusted, operated, maintained, repaired or
altered by persons other than Rapistan Systems.
If the goods include computer hardware or software acquired from original
manufacturers, Rapistan Systems' obligation will be limited to conveying
and transferring to Purchaser any interest, rights and/or warranties which
Rapistan Systems may obtain.
RAPISTAN SYSTEMS MAKES NO ADDITIONAL WARRANTIES, EXPRESS OR IMPLIED, ASTO
ANY GOODS, AND IN PARTICULAR RAPISTAN SYSTEMS MAKES NO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
3. INSURANCE BY RAPISTAN SYSTEMS: Rapistan Systems will maintain insurance
covering its operations as follows:
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a. Worker's Compensation Insurance as required by the state having
jurisdiction over Rapistan Systems and Employer's Liability with
limit of $1,000.000.
b. Comprehensive General Liability Insurance with combined single limit
for bodily injuries and property damage of $1,000,000.
c. Automotive Liability Insurance for bodily injuries, including death
and property damage with combined single limit of $1,000,000.
Rapistan Systems may, at its sole option, satisfy these requirements
with commercial insurance or through a program of combined
self-insurance, self-insured retention, and excess insurance.
Certificates of insurance or letter of authority to self-insure will
be furnished upon request.
4. INSURANCE BY PURCHASER: Purchaser assumes all risk of loss from damage and
destruction of the material and equipment and any applicable installation
charges thereof. Such risk of loss will transfer to Purchaser at the
F.O.B. point pursuant to the shipping terms of the Agreement. Purchaser
agrees to acquire and maintain all risk insurance covering damage and
destruction of the materials and equipment at replacement value and in no
event less than the purchase price including any increases by change
order(s). The insurance policy or policies shall name Rapistan Systems as
an insured, shall provide for 20 days prior notification to Rapistan
Systems if the insurance coverage is terminated, reduced, or otherwise
materially modified, and shall provide that the insurance proceeds shall
be payable to Rapistan Systems and Purchaser as their interests may
appear. Payments made by an insurance carrier to Rapistan Systems as a
result of such damage or destruction of the equipment will be applied
against the purchase price and any other amounts owed by Purchaser under
the Agreement. Purchaser shall furnish Rapistan Systems with certificates
evidencing such insurance.
5. INDEMNIFICATION: The equipment furnished hereunder will be manufactured
with Rapistan Systems safety features and furnished with user safety
instructions. The operation of the equipment with safety features removed
or modified and/or the disregard of the user safety instructions is
outside of Rapistan Systems' control and is the responsibility of the
Purchaser. Therefore, Purchaser agrees to indemnify and hold Rapistan
Systems harmless from any and all claims, demands, liabilities, causes of
action, suits, costs, and expenses of any kind or nature (including
attorney's fees) for loss or damage which may be suffered by Rapistan
Systems as a result of injury to persons arising from such removal or
modification to Rapistan Systems furnished safety features and/or the
disregard of Rapistan Systems furnished safety features and/or the
disregard of Rapistan Systems-furnished user safety instructions,
including any person injured while riding, sitting, stepping, walking, or
climbing on the equipment furnished hereunder.
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6. CHANGE ORDER: The parties may agree at any time prior to final payment of
the Agreement to make additions, deletions, or other revisions by Change
Order or Work Order (as defined below) without invalidating the Agreement.
No such changes will be performed by Rapistan Systems until an approved
Change Order or Work Order is executed as provided below.
a. When the price, schedule and other conditions relating to the change
can be determined prior to the start of work under the change, a
document describing this change (Change Order) will be issued for
execution by the parties.
b. When the change requires immediate action and the issuance of an
executed Change Order with firm price would unreasonably delay the
change, Purchaser shall place its signature upon a document
authorizing Rapistan Systems to proceed with the change (Work
Order). After the change under the Work Order has been completed,
Rapistan Systems will calculate the firm price for the change using
actual costs (including overhead and reasonable profit) current at
time of performance of the work. Completed Work Order(s) will be
incorporated into a Change Order for execution by the parties.
Unless expressly modified by a Change Order or Work Order, the
provisions of the Agreement will govern all work performed under
such Change Order or Work Order.
7. LIENS: Rapistan Systems will protect Purchaser as to any lien asserted
against Purchaser's property for work, material, or services furnished by
others at Rapistan Systems' request when Purchaser makes the payments
provided for in the Agreement.
8. RIGHTS AND REMEDIES: If Rapistan Systems defaults in the performance of
any of its obligations under the Agreement (other than its obligations
under Article 2 hereof) and if Rapistan Systems has not cured the default
or implemented a plan to cure the default in a diligent manner within 20
days after Purchaser shall have given Rapistan Systems written notice of
the default, or such other time period as mutually agreed upon, Purchaser
shall have the right to terminate the Agreement upon written notice to
Rapistan Systems. In the event of such termination, Purchaser may (i) pay
to Rapistan Systems the reasonable value of equipment and services already
provided to Purchaser, or (ii) complete the work specified in the
Agreement.
If purchaser elects to complete the work and the reasonable costs of
completion exceed the unpaid balance of the Agreement price, Rapistan
Systems shall pay the difference to the Purchaser. If the unpaid balance
of the purchase price exceeds the reasonable cost of completion, Purchaser
shall pay the difference to Rapistan Systems.
If Purchaser fails to pay the purchase price or any installment thereof,
10 days after it is due, or if Purchaser defaults in the performance of
any of its other obligations under the Agreement and if the default
continues 20 days after Rapistan Systems gives Purchaser
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written notice thereof, or such other time period as mutually agreed upon,
then Rapistan Systems shall have the right to (i) suspend performance of
its obligation under the Agreement until the default is cured, or (ii)
exercise any remedy provided for in the Agreement, or available to
Rapistan Systems under the applicable law.
9. SECURITY INTEREST AND TITLE:
a. Rapistan Systems retains a security interest in the equipment to secure
the purchase price payable by Purchaser under the Agreement and all other
amounts now and hereafter owing by Purchaser to Rapistan hereunder. Upon
request by Rapistan Systems, Purchaser will execute and deliver to
Rapistan Systems a financing statement evidencing this security interest.
b. Rapistan Systems hereby grants Purchaser a single site non-transferable
and non-exclusive license to use all computer software manufactured and
provided by Rapistan Systems under the Agreement. Title to the software
and documentation, if any, provided hereunder shall at all times remain
with Rapistan Systems. Purchaser agrees to use such software strictly in
compliance with the terms of the Agreement, and for the use(s)
contemplated herein, and specifically agrees not to copy, furnish,
disclose, or otherwise make said software, or any portion thereof,
available to any third party.
c. The Rapistan Systems manufactured and provided software is a proprietary
trade secret of Rapistan Systems. Purchaser agrees to maintain
confidentiality of Rapistan Systems software, and to restrict access to
Purchaser's employees or agents directly concerned with Purchaser's
licensed use of same.
d. Refer to Article 2 for provisions of title for software which Rapistan
Systems acquires from original manufacturers.
10. DELAYS: If Rapistan Systems' performance is delayed or prevented by
Purchaser or other cause uncontrolled by Rapistan Systems (such as
casualty, labor trouble, governmental action, inability to obtain supplies
or transportation, or any order modification by the Purchaser):
Purchaser agrees to pay Rapistan Systems invoices upon notification that
equipment is ready for shipment in accordance with the shipping schedule
and to reimburse Rapistan Systems for expenses incident to such delay
including, without limitation, the cost of engineering, equipment and
installation escalations; maintaining, repairing and refurbishing
equipment; storage, demurrage, and pullout charges from installation site;
and
The time for delivery of the equipment and performance of the services
will be extended accordingly, and Rapistan Systems will not be liable for
any damages caused by the delay; and
The stated purchase price shall be revised based upon labor wage rates and
other conditions prevailing at the time of actual performance.
11. PATENTS: Rapistan Systems agrees to indemnify and hold Purchaser harmless
from any damages that may be awarded against Purchaser in any final
judgment based upon a claim
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that the equipment or its use infringes any currently existing United
States patents owned by third parties, provided that Purchaser notifies
Rapistan Systems in writing within 10 days of Purchaser's knowledge of any
such claim, and gives Rapistan Systems the exclusive control of the
defense and settlement of any claim, including the right to make changes
in the equipment to avoid alleged infringement. Purchaser is responsible
for any infringement claim arising from any modifications of the equipment
by Purchaser or any combining by Purchaser of the equipment with other
equipment not furnished by Rapistan Systems.
12. ASSIGNMENT/SUBCONTRACTS: Purchaser shall not delegate the performance of
any obligation hereunder, nor assign any rights arising under the
Agreement, to any third person without the prior written consent of
Rapistan Systems.
Rapistan Systems reserves the right to use subcontractors in the
performance of any services to be performed by Rapistan Systems. Rapistan
Systems is responsible for the acts and omissions of any subcontractor so
engaged.
13. LIMITATION OF REMEDIES/GOVERNING LAW: The Agreement sets forth Purchaser's
sole and exclusive remedies for any defect in or non-conformity of any
equipment of services and for any negligent design, manufacture, or
installation of the equipment, and for any breach of the Agreement by
Rapistan Systems. Rapistan Systems in no event shall be liable for
incidental or consequential damages (including loss of profit).
The Agreement shall be interpreted and enforced in accordance with the
substantive laws of the State of Michigan.
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