SERVICE AGREEMENT
TABLE OF CONTENTS
Page
Section 1 General Description of Services
to be Provided by TDC................................ 1
Section 2 Customer Support Services
2.01 General......................................... 2
2.02 Transfer of ▇▇▇▇▇ Team.......................... 2
2.03 Severance and Other Liability................... 3
Section 3 Warehousing Services
3.01 General......................................... 3
3.02 Receiving....................................... 3
3.03 Warehousing..................................... 4
3.04 Stocking........................................ 5
3.05 Picking......................................... 5
3.06 Packaging....................................... 6
3.07 Shipping........................................ 6
3.08 MANUFACTURER's Access to Warehouse.............. 7
3.09 Inventory Plans................................. 7
3.10 Annual Inventory................................ 8
3.11 Inventory Records............................... 8
3.12 Title/Risk of Loss.............................. 8
Section 4 Computer Services
4.01 General......................................... 9
4.02 Availability.................................... 9
4.03 Computer Services Fees.......................... 9
4.04 Capacity........................................ 10
4.05 Telecommunications.............................. 10
Section 5 Accounting Services
5.01 General......................................... 10
5.02 Cash Management................................. 10
5.03 Records......................................... 10
5.04 General Ledger.................................. 11
5.05 Accountant Services Fees........................ 11
5.06 Operations...................................... 11
5.07 Sales Transactions.............................. 12
5.08 Invoices........................................ 12
5.09 Accounts Payable................................ 13
5.10 Invoice Inquiries............................... 14
5.11 Inventory Accountant............................ 14
5.12 Establishment of Standard Cost.................. 14
5.13 Inventory Shrinkage............................. 15
5.14 Financial Reports............................... 15
Section 6 Consideration to TDC
6.01 Base Fees....................................... 15
6.02 Other Costs..................................... 17
6.03 Cost Improvements............................... 17
6.04 Transfer........................................ 18
Section 7 Control and Rights of Parties
7.01 Independent Contractor Status................... 18
7.02 Employment of Workers by TDC.................... 19
Section 8 Insurance
8.01 General......................................... 19
Section 9 Duration and Termination
9.01 Initial Term.................................... 20
9.02 Early Termination............................... 20
Section 10 Indemnification
10.01 Indemnity Provisions............................ 20
10.02 MANUFACTURER Responsibility..................... 21
10.03 Other Damages................................... 21
Section 11 Trademarks and Trade Names............................... 21
Section 12 Confidentiality.......................................... 22
Section 13 Force Majeure............................................ 22
Section 14 Notices.................................................. 22
Section 15 No Waiver of Rights...................................... 23
Section 16 Assignment............................................... 23
Section 17 Integration.............................................. 24
Section 18 Severability............................................. 24
Section 19 Governing Law and Choice of Forum........................ 24
Exhibit 1 - Terex Distribution Center Performance Objectives.... 26
Exhibit 2 - Schedule of Service Fees............................ 29
Exhibit 3 - TDC System Services Data Center Services............ 30
Schedule 2.01 - ▇▇▇▇▇ Team Member Costs............................. 47
Schedule 2.02 ▇▇▇▇▇ Team Members Employed by TDC
as of November 27, 1996.......................... 48
Schedule 3.03 - TDC's Inventory Disposition Procedures.............. 49
Schedule 3.05 - TDC's Picking Procedures............................ 50
Schedule 4.04 - Computer Contract with ▇▇▇▇▇▇ Computer Services..... 51
Schedule 5.02 - TDC's Cash Management Procedures.................... 52
SERVICE AGREEMENT
THIS SERVICE AGREEMENT is made as of November 27, 1996, by and between
TEREX CORPORATION, a Delaware corporation, with its principal offices at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("TEREX") and ▇▇▇▇▇ MATERIAL
HANDLING COMPANY (formerly known as CMHC Acquisition Corporation), a corporation
organized under the laws of Delaware with principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("MANUFACTURER").
W I T N E S S E T H
WHEREAS, TEREX and MANUFACTURER have entered into a Purchase Agreement
dated as of November 9, 1996 (the "Purchase Agreement") pursuant to which TEREX
has sold and MANUFACTURER has purchased all of the assets of TEREX's ▇▇▇▇▇
Material Handling Company subsidiary and the stock of various foreign ▇▇▇▇▇
subsidiaries (collectively, "▇▇▇▇▇");
WHEREAS, TEREX owns and operates a division with a single facility in
Southaven, Mississippi, the TEREX DISTRIBUTION CENTER ("TDC"), engaged primarily
in the business of aftermarket service parts distribution services for TEREX's
divisions and subsidiaries, including ▇▇▇▇▇;
WHEREAS, MANUFACTURER desires to employ certain employees of TDC for
provision of Customer Support Services (as hereinafter defined) and to retain
TDC for the distribution services required by ▇▇▇▇▇, and TEREX consents to such
retention in accordance with the terms set forth herein.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter set forth, the parties hereto agree as follows
Section 1. General Description of Services to be Provided by TDC.
TDC shall provide Customer Support Services, Warehousing Services,
Computer Services and Aftermarket Accounting Services, each as defined herein,
to MANUFACTURER during the term of this Agreement to support the distribution of
MANUFACTURER's aftermarket service parts ("Parts") at a level of service that is
consistent with the level of service provided to ▇▇▇▇▇ by TDC prior to execution
of the Purchase Agreement.
Section 2. Customer Support Services.
2.01 General. In consideration of the Base Fees (as defined in Section
6 hereof), TDC shall permit not more than thirty-five (35) ▇▇▇▇▇
employees (the "▇▇▇▇▇ Team") to work at TDC's facility to provide ▇▇▇▇▇
with Customer Support Services. "Customer Support Services" to be
performed by the ▇▇▇▇▇ Team at TDC's facility consist generally of the
purchasing function for all Parts, the material planning function for
all Parts and the provision of customer service, including technical
assistance, to MANUFACTURER's Parts customers. All members of the ▇▇▇▇▇
Team shall comply with all work rules and safety and other guidelines
in effect at TDC's facility. MANUFACTURER shall be solely responsible
for all costs incurred in connection with the provision of Customer
Support Services, including, without limitation, the salaries and other
benefits of ▇▇▇▇▇ Team members and the purchase cost of Parts. Except
as explicitly set forth in this Agreement, TDC shall have no liability
for the ▇▇▇▇▇ Team or the provision of Customer Support Services.
Attached as Schedule 2.01 is a list of the costs incurred by the ▇▇▇▇▇
Team members in 1995 and for the first six (6) months of 1996, all of
which categories of costs, as well as any additional costs incurred by
the ▇▇▇▇▇ Team members, shall be the responsibility of MANUFACTURER.
2.02 Transfer of ▇▇▇▇▇ Team. Attached as Schedule 2.02 is a list of the
members of the ▇▇▇▇▇ Team who are employed by TDC as of the date of
this Agreement and their respective salaries and other benefits. Upon
execution of this Agreement, MANUFACTURER shall arrange for ▇▇▇▇▇ to
offer employment, on terms comparable to those currently provided by
TDC, to all ▇▇▇▇▇ Team members listed on Schedule 2.02, it being agreed
that ▇▇▇▇▇ Team members who are on layoff and who have a right to
return to work or who are on short term (up to six (6) months) medical
disability (including pregnancy leave) are to be considered actively
employed but that employees on long-term medical disability and
employees whose employment has terminated as of the date of this
Agreement without any right to return to work are not to be considered
actively employed. TDC shall use reasonable efforts to cause the ▇▇▇▇▇
Team members to become employees of ▇▇▇▇▇, which reasonable efforts
shall include discussing terms and conditions of employment with ▇▇▇▇▇
and MANUFACTURER and distribution to the ▇▇▇▇▇ Team members of forms
and documents relating to employment with ▇▇▇▇▇. TDC shall deliver to
MANUFACTURER and ▇▇▇▇▇ copies of all personnel files relating to the
▇▇▇▇▇ Team members who accept employment with ▇▇▇▇▇.
2.03 Severance and Other Liability. MANUFACTURER shall assume,
discharge, pay and be solely liable for and shall indemnify and hold
TDC harmless from and against all obligation, cost or expense for (i)
any unearned vacation, holiday pay or other fringe benefits relating to
the ▇▇▇▇▇ Team members as listed on Schedule 2.02, (ii) any health,
disability or life insurance coverage and any medical and dental
benefits payable after the date hereof, (iii) severance pay,
termination indemnity pay, salary continuation or like compensation
under TDC's plans, policies or arrangements and relating to ▇▇▇▇▇ Team
Members, including, without limitation, any claim of constructive
termination due to the transfer to ▇▇▇▇▇ or (iv) any other claim or
liability arising out of the employment of the ▇▇▇▇▇ Team members by
▇▇▇▇▇ on of after the date hereof.
Section 3. Warehousing Services.
3.01 General. In consideration of the Base Fees, TDC shall provide the
Warehousing Services described in this Section 3. Warehousing Services
shall consist generally of receiving Parts purchased by MANUFACTURER,
storing such Parts, identifying such Parts for shipment to Parts
customers, coordinating with MANUFACTURER's packaging suppliers,
packing such Parts and finally shipping such Parts at level of service
which is consistent with the level of service provided as of the date
of this Agreement. To assist TDC in its operational planning,
MANUFACTURER shall provide TDC with its annual sales plan, updated
quarterly to current projections. The sales plan may be expressed
either in dollars or preferably in the number of line items by order
class.
3.02 Receiving. TDC shall receive all Parts purchased by MANUFACTURER
at TDC's Southaven, Mississippi facility and shall visually inspect
such Parts to insure conformance with the terms of the applicable
purchase order. TDC shall advise MANUFACTURER of any damage, other
irregularity or shortage which TDC observes during its receiving
process, as TDC deems appropriate. The Base Fees do not include
inbound receiving quality inspecting of materials received at TDC's
facility. Any such services may be provided to MANUFACTURER upon
request at additional cost.
3.03 Warehousing.
(a) Parts owned by MANUFACTURER shall be stored by TDC for
warehousing, order fulfillment and distribution. TDC's
procedures for inventory disposition are attached hereto as
Schedule 3.03. Said inventories shall remain the sole property
of MANUFACTURER and shall not be disposed of by TDC except
under procedures in effect as of the date of this Agreement or
as provided for by specific instructions established by
MANUFACTURER.
(b) MANUFACTURER agrees to pay the full amount of any and all
taxes levied or assessed against sales, inventories or
personal property on the premises of TDC.
(c) TDC shall provide MANUFACTURER with sufficient storage
capacity for up to Twenty-Two Million Dollars ($22,000,000) of
Parts (FIFO value at standard cost adjusted for the average
change in annual standard costs) in the possession of TDC
(excluding inventories in transit, at packagers and return
material processors)(the "Capacity Value"). If MANUFACTURER
requires additional Capacity Value, the parties shall
negotiate an increase to the Base Fees. TDC represents that as
of the date of this Agreement, storage requirements for ▇▇▇▇▇
Parts for 1996 has been at approximately Nineteen Million Five
Hundred Ten Thousand Five Hundred Ninety-three Dollars
(US)($19,510,593).
(d) TDC shall provide sufficient security for MANUFACTURER's
inventories at all times. Said security shall include, but not
be limited to, fire protection systems, hazardous material
storage areas, appropriate bins and racks and controlled
access to TDC warehouse facilities, and shall at a minimum be
at least equal to the TDC security systems, methods and
procedures in effect as of the date of this Agreement.
3.04 Stocking.
(a) TDC shall have the sole responsibility for determining the
stocking location and movement of Parts within TDC's facility.
It is the responsibility of TDC to monitor, track and control
the location of inventories within the custody of TDC.
(b) MANUFACTURER shall issue timely instructions for the
disposition of any inventory which is being restricted by
MANUFACTURER from sale or normal storage (rejected parts,
unidentified parts, etc.)
(c) Parts received in TDC's facility shall be stored
("putaway") in an appropriate storage area and updated in the
inventory data base within the time periods set forth in Part
A of Exhibit 1. Notwithstanding the foregoing, in the event
that TDC cannot maintain "putaway" and "update" requirements
because of TDC observed holidays or other shutdowns, TDC shall
normalize operations in three (3) workdays for two (2)
consecutive shut down days.
3.05 Picking.
(a) TDC's picking procedures are set forth in Schedule 3.05
attached hereto. All Parts removed from TDC's facility shall
be relieved from the TDC inventory record of Parts delivered
to TDC by MANUFACTURER. MANUFACTURER shall not remove any
Parts or other materials from TDC's facility without
compliance with TDC's procedures.
(b) Parts orders shall be transmitted by MANUFACTURER to the
TDC warehouse computer between 7:00 a.m. and 7:00 p.m.
(Central Time) on scheduled workdays. The Base Fees do not
include processing of manual orders for which MANUFACTURER
shall pay the additional charges set forth in Exhibit 2.
(c) MANUFACTURER uses a system of Parts order codes which have
different service priorities. TDC shall fill orders according
to MANUFACTURER service objectives and priorities; provided,
however, that TDC shall not be liable for delays due in whole
or in part to MANUFACTURER's delay in payment of Part
suppliers, delays by Part suppliers or packagers or other
events beyond the reasonable control of TDC. Order codes and
their corresponding order fulfillment objectives are specified
in Part B of Exhibit 1. TDC shall maintain sufficient
manpower, equipment and other resources required to obtain the
order fulfillment requirements specified in Exhibit 1 provided
rush order line volumes (Codes 1 and 2, as currently defined)
on any given day do not exceed 150% of the daily line average
over the preceding twelve months.
3.06 Packaging. MANUFACTURER has the primary responsibility for
defining and contracting prepackaging, which shall include reasonable
TDC specifications for handling and storage requirements. MANUFACTURER
shall be responsible for all shipment costs, including freight,
insurance and duty costs incurred in the shipment of materials to and
from the packagers. The Base Fees include the cost of relabeling,
repackaging, or correcting minor packager errors that do not cause TDC
to incur incremental labor or material cost. TDC shall promptly advise
MANUFACTURER of major packager errors. At MANUFACTURER's request, TDC
will correct such errors and charge MANUFACTURER at the special charges
rates set forth in Exhibit 2. The Base Fees do not include charges for
unpacking and restocking canceled orders, which services shall be
performed for MANUFACTURER at the rates set forth in Exhibit 2.
3.07 Shipping.
(a) TDC shall arrange for the shipment of all Parts to
MANUFACTURER's customers, including by providing for customer
order pick-ups during normal working hours.
(b) TDC shall provide domestic and export inbound and outbound
transportation services, all rate negotiations, and have
responsibility for reviewing freight and brokerage invoices
for accuracy. Shipping costs are not included in the Base Fees
and shall be paid by checks prepared by TDC and drawn on
MANUFACTURER's account in accordance with the cash management
procedures set forth in Section 5.02 hereof.
(c) TDC shall debit an account designated by MANUFACTURER on a
daily basis to cover the shipping costs incurred as of that
date in accordance with the cash management procedures set
forth in Section 5.02 hereof. TDC shall use commercially
reasonable efforts to consolidate customer orders whenever
possible, unless otherwise instructed by MANUFACTURER.
(d) TDC shall provide outbound packing materials for normal
and Canadian orders not requiring special handling or packing.
Export or special handling or packing may result in additional
fees which shall be invoiced to MANUFACTURER. MANUFACTURER may
request special handling, marking or packing on specific
orders. The incremental costs of these special requirements
over standard packing material costs shall be invoiced to
MANUFACTURER.
(e) TDC shall use packing materials methods and procedures
which will protect materials when handled with normal care
customary for the specified mode of shipment.
3.08 MANUFACTURER's Access to Warehouse. MANUFACTURER and its employees
shall have access to TDC's facility. In addition, TDC shall make its
facility available during normal working hours, upon reasonable notice,
for dealer and prospective customers; provided, however, that TDC may,
if it deems necessary to do so, impose reasonable time limits on the
duration and quantity of such visits. The foregoing not withstanding,
MANUFACTURER shall not arrange any warehouse tours of duration beyond
one hour, with any competitor of TDC without prior approval of TDC.
3.09 Inventory Plans. MANUFACTURER shall provide TDC its annual
inventory plan, updated quarterly to current projections, by the end of
the first month of each calendar quarter. The parties shall establish
an annual calendar of operations during each preceding December which
specifies holidays to be observed, annual inventory dates and any other
planned shutdown of regular operations. In connection therewith, unless
otherwise agreed, in no event will TDC operations be suspended for more
than a maximum of two consecutive workdays.
3.10 Annual Inventory. During the Initial Term (as defined in Section
9), and for each succeeding twelve (12) month period thereafter, TDC
shall complete a cycle count of one hundred percent (100%) of
MANUFACTURER's inventory. Any inventory discrepancies discovered shall
be investigated on the day the discrepancy is noted. In addition to
ongoing cycle counting, during the Term and each succeeding twelve (12)
month period thereafter, TDC's operations shall be suspended for a
maximum of one and one-half working days for an annual statistical
sample inventory. The parties shall negotiate in good faith the
parameters of the annual statistical sample inventory at least thirty
(30) days prior to commencement of the sample inventory. TDC shall
provide sufficient resources for the annual statistical sample
inventory. The cost of the annual statistical sample inventory,
excluding MANUFACTURER's direct resource costs, is included within the
Base Fees. Prior to a full physical inventory, if one is necessary, the
parties shall agree upon a plan to combine resources to ensure that the
shutdown period does not exceed two (2) working days. MANUFACTURER
shall provide resources, including human resources, as required for
reconciling a physical count, if any, to the perpetual inventory
records. A full physical inventory, if necessary, may require
additional downtime. The cost of a full physical inventory is not
included in the Base Fees.
3.11 Inventory Records. All Parts removed from TDC facilities must be
relieved from the TDC inventory record of Parts delivered to TDC by
MANUFACTURER. MANUFACTURER will not remove any Parts or materials from
the TDC warehouse without complying with mutually agreed procedures,
which, at a minimum, will provide for adequate inventory accounting.
3.12 Title/Risk of Loss. Title to the Products delivered by or on
behalf of MANUFACTURER to TDC shall remain vested in MANUFACTURER until
the Products are purchased and delivered to MANUFACTURER's customers.
Except as provided for in this Agreement, TDC shall not assert or claim
any right of ownership in the Products and shall not encumber, lease,
transfer, sell or otherwise dispose of any of the Products. TDC hereby
waives and releases any right, claim, interest or lien in and to the
Products that may arise by operation of law. In addition, TDC shall not
possess or acquire any interest, whether directly or indirectly, in the
accounts arising from such sales, and all invoices for such sales shall
be mailed for the account of MANUFACTURER to the persons purchasing the
Products in accordance with the provisions of this Agreement. Except
for inventory shrinkage in reasonable and customary amounts as set
forth in Section 5.13 hereof, TDC shall bear the risk of loss with
respect to the Products stored at TDC's facility.
Section 4. Computer Services.
4.01 General. In consideration of the Base Fees, TDC shall provide
Computer Services, as defined in this Section 4, to support the
aftermarket operations of MANUFACTURER at the levels currently provided
by TDC to ▇▇▇▇▇. The systems provided by TDC under this Agreement are
as specified in Exhibit 3.
4.02 Availability. TDC shall provide on-line (CICS) availability of the
systems between 7:00 a.m. and 7:00 p.m. (Central Time), Monday though
Friday, excluding previously schedules non-working days (collectively,
the "prime hours"). In the event of non-scheduled system downtime
during prime hours, TDC agrees to provide non-prime time on-line CICS
availability of duration and timing that allows the MANUFACTURER and
TDC backlog of on-line transactions, caused by system downtime, to be
made current as soon as feasible. TDC shall maintain average on-line
system availability during CICS prime hours at a minimum of
ninety-eight percent (98%). MANUFACTURER and TDC have an objective of
average on-line availability of nine-nine percent (99%).
4.03 Computer Services Fees. Computer Services are included in the
Base Fees. Any different or additional services shall result in
additional charges which shall be invoiced to MANUFACTURER.
4.04 Capacity. TDC agrees to provide central processing capacity (CPU
capacity) and storage capability (DASD) to meet the MANUFACTURER's
requirements defined in this Agreement. TDC represents that the CPU
capacity to which it has access pursuant to any agreement between TDC
and ▇▇▇▇▇▇ Computer Services attached hereto as Schedule 4.04 is
sufficient to meet its obligations under this Agreement. If additional
equipment is required as a result of an increase required in storage
capacity or annual gross sales volume in excess of Eighty Million
Dollars, MANUFACTURER shall be invoiced for the additional cost.
4.05 Telecommunications. TDC will provide at its own expense
telecommunications to MANUFACTURER at the level existing as of the date
hereof. Any additional telecommunications capability shall result in
additional charges to be invoiced to MANUFACTURER.
Section 5. Accounting Services.
5.01 General. In consideration of the Base Fees, TDC shall provide
MANUFACTURER with aftermarket Accounting Services as defined in this
Section 5.
5.02 Cash Management. TDC and MANUFACTURER shall comply with the cash
management procedures set forth in Schedule 5.02 hereof to ensure
timely payment of all amounts due by MANUFACTURER.
5.03 Records. Accounting records of the MANUFACTURER aftermarket
operations shall remain the exclusive property of MANUFACTURER and
shall not be provided to any third party by TDC, without the prior
written permission of MANUFACTURER, except as may be required by final
order of a relevant court or otherwise authorized pursuant to this
Agreement. MANUFACTURER hereby authorizes TDC to provide TEREX and
TEREX's accountants, lawyers and other representatives with any
accounting information reasonably and customarily requested by those
parties and necessary to comply with applicable laws and financial
disclosure requirements or to ensure TDC's fulfillment of its
obligations under this Agreement.
5.04 General Ledger. TDC shall maintain general ledger account records
in accordance with generally accepted accounting practices (GAAP) for
MANUFACTURER's aftermarket operations for all activities supported by
TDC.
5.05 Accountant Services Fees. The Accounting Services described in
this Section 5 are included in the Base Fees. Upon request, TDC shall
quote prices for additional aftermarket accounting, forecasting and
budget records or services. The Base Fees do not provide for any major
change from current specifications or interface requirements for the
transmittal of accounts receivable date and provides for a maximum of
one hundred (100) ledger accounts.
5.06 Operations. TDC shall close each monthly accounting cycle by 5:00
p.m. on the fourth business day of the following month, and provide
MANUFACTURER with summary financial statements by the close of business
on the fifth working day of the following month. The parties agree that
in order for TDC to comply with the preceding requirement, certain
month-end accruals may contain estimates. In such event, TDC, with
information from MANUFACTURER if required, shall adjust estimated
accruals to actual amounts during the next accounting month. This
Agreement provides for a MANUFACTURER fiscal year ending each December
31st. TDC shall reconcile all MANUFACTURER general ledger balance sheet
accounts to the appropriate ledger detail quarterly, except for
inventory accounts reconciled annually as part of the physical
inventory process. TDC shall review reconciliations with the
MANUFACTURER's Controller. In the event unreconciled differences are
encountered, TDC shall promptly investigate the cause and recommend
appropriate remedial steps for implementation following MANUFACTURER
approval.
5.07 Sales Transactions. TDC shall prepare invoices for shipments to
MANUFACTURER customers on behalf of, and in the name of, MANUFACTURER,
at prices specified by MANUFACTURER. Records of sales transactions
shall be entered directly into the MANUFACTURER accounts maintained by
TDC. MANUFACTURER shall provide TDC with current export and domestic
customer prices. TDC shall prepare invoices at said amounts unless
otherwise advised by MANUFACTURER. TDC shall invoice shipments no later
than the batch run on the day following shipment, unless otherwise
agreed. Shipments not invoiced by the close of business on the last day
of each month shall be accrued as sales during the month when shipment
was made. TDC shall transmit MANUFACTURER's accounts receivable
information to a location designated by MANUFACTURER.
5.08 Invoices.
(a) MANUFACTURER is responsible for approving the issuance by
TDC of any required debit or credit memo to a MANUFACTURER
customer. MANUFACTURER shall adhere to established inventory
accounting procedures acceptable to TDC, when processing such
memos. Any failures by MANUFACTURER to comply with the
established procedures shall void any TDC guarantees of
inventory shrinkage to the extent that such failure has a
direct impact on inventory shrinkage.
(b) MANUFACTURER may ship parts directly from a vendor to a
customer ("ship direct transactions"). TDC shall account for
ship direct transactions under procedures in effect as of the
date of this Agreement, or as otherwise agreed in writing.
(c) TDC shall maintain a current record of MANUFACTURER's
customers. Within this record will be kept all pertinent
accounting and billing information that the systems allow, as
of the date of this Agreement. MANUFACTURER is responsible for
promptly notifying TDC, in writing, of any customer record
modifications.
5.09 Accounts Payable.
(a) TDC shall promptly process payment of vendor invoices for
MANUFACTURER under mutually acceptable procedures, as
specified herein. MANUFACTURER shall instruct its vendors to
include the appropriate MANUFACTURER purchase order number and
MANUFACTURER part numbers on each invoice. TDC shall process
all invoices for Parts purchased by MANUFACTURER for inventory
when said invoices agree in price, quantity and terms of the
appropriate MANUFACTURER purchase order, and there is a
corresponding receiving record in the MANUFACTURER's inventory
accounts.
(b) Processing invoices meeting the conditions set forth above
under clause (a) does not require the prior review by
MANUFACTURER. The parties shall agree on a specific dollar
variance tolerance to the purchase order terms and receiving
records, under which TDC my expedite the processing of
invoices, without prior authorization from MANUFACTURER. In
the event that MANUFACTURER does not provide instructions to
TDC for processing invoices not complying with this Subsection
within five (5) working days, TDC shall process a net payment
equal to the MANUFACTURER purchase order price times the
quantity received as per the MANUFACTURER's receiving records.
Invoices paid in variance to the current MANUFACTURER standard
cost shall be accounted for under the procedures in effect at
the date of this Agreement, or as mutually agreed upon from
time to time.
(c) TDC shall process payment to MANUFACTURER's vendors within
the terms and conditions defined in the MANUFACTURER purchase
orders by preparing checks drawn on an account held and
designated by MANUFACTURER. The checks will be mailed promptly
by TDC personnel through the US mail, or as otherwise agreed
by both parties. Checks delivered by other than US mail may be
subject to additional fees. MANUFACTURER shall notify TDC in
advance of its intent to modify or deviate from its standard
terms and conditions.
(d) TDC shall maintain the active vendor records in the
accounts payable system. MANUFACTURER is responsible for
promptly notifying TDC of vendor records modifications.
5.10 Invoice Inquiries. TDC shall receive initial inquiries from
MANUFACTURER vendors directed to TDC regarding requests for payments,
perform reasonable investigation, and promptly inform MANUFACTURER of
situations where TDC has insufficient basis for processing the payment
vendor invoices.
5.11 Inventory Accounting. TDC shall account for all MANUFACTURER
inventories within the possession of TDC and within the possession of
mutually agreed upon prepackagers. TDC shall record in the MANUFACTURER
ledgers MANUFACTURER's estimates of the material in-transit, as well as
inventory reserves for obsolescence and shrinkage.
5.12 Establishment of Standard Cost. MANUFACTURER shall establish
standard costs once per year. No change in any MANUFACTURER standard
cost can by made without the knowledge of the TDC controller. If
MANUFACTURER changes any standard cost without the written approval of
the TDC controller, any TDC guarantees concerning shrinkage shall
automatically be canceled for that inventory year. The procedures and
schedule for the annual standard cost change shall be finalized in a
timely manner, both parties agreeing to the terms and conditions
outlines therein; otherwise procedures utilized in the prior year shall
apply.
5.13 Inventory Shrinkage. TDC shall compensate MANUFACTURER for
inventory shrinkage in excess of reasonable and customary amounts, as
defined by the formula set forth in Part C of Exhibit 1; provided that
MANUFACTURER complies with the standard cost rules specified in this
Section 5 as well as other applicable provisions of this Agreement.
MANUFACTURER agrees to comply with TDC's established procedures and
practices in place as of the date of this Agreement, of inventory
related transactions, and to require their packagers to do the same.
MANUFACTURER agrees that any errors or omissions made by MANUFACTURER
personnel or MANUFACTURER's packagers are the responsibility of
MANUFACTURER and are not covered by this Subsection 5.13. TDC agrees
that any errors or omissions made by TDC personnel or agents of TDC are
the responsibility of TDC, except for appropriate correction for prior
entries under GAAP.
5.14 Financial Reports. TDC shall provide accounting information and
reports similar to the reporting as of the date of this Agreement to
permit MANUFACTURER to monitor is aftermarket operations to the extent
they are accounted for by TDC services. TDC agrees to comply with any
reasonable modifications to existing reports, as may be requested by
MANUFACTURER.
Any major modifications are subject to negotiations.
Section 6. Consideration to TDC.
6.01 Base Fees.
(a) For all services provided hereunder through December 31,
1996, MANUFACTURER shall pay TDC a monthly fee of Four Hundred
Sixty-Six Thousand Six Hundred Sixty-Seven Dollars (US)
($466,667)(the "1996 Monthly Fee"), which amounts shall be
payable on the first business day of each calendar month, in
arrears, by wire to an account designated by TDC. The 1996
Monthly Fee shall be payable on December 31, 1996. In the
event that this Agreement commences on a date other than the
first business day of a calendar month, the 1996 Monthly Fee
for the balance of the first full calendar month shall be
prorated based on the number of calendar days in such month
and payable on the first business day of the calendar month
immediately following the first full calendar month of the
Agreement.
(b) For all services provided hereunder from January 1, 1997,
through expiration of the Term, MANUFACTURER shall pay TDC a
monthly fee of Four Hundred Ninety Thousand Dollars (US)
($490,000) (the "Monthly Fee"), subject to credit as a result
of Cost Savings (defined below) as provided for in Section
6.03, which amounts shall be payable in arrears by wire to an
account designated by TDC on the first business day of each
month for the immediate preceding month.
(c) The 1996 Monthly Fees and the Monthly Fees are
collectively referred to herein as the "Base Fees." The
parties acknowledge and agree that the Base Fees were computed
based on a Capacity Value of $22,000,000, a current annual
gross sales volume of $79.3 million for ▇▇▇▇▇ Parts as well as
on the level of services currently provided by TDC to ▇▇▇▇▇ as
set forth in this Agreement. In the event that the gross sales
volumes for the Term exceeds $79.3 million, the Base Fees paid
during the Term shall increase by 5.8% of the excess of the
gross sales for the Term over $79.3 million. Such additional
amount shall be payable within forty-five (45) calendar days
following expiration of the Term.
(d) The Base Fees do not include any amounts for provision of
Customer Support Services, including, without limitation,
amounts due MANUFACTURER's vendors or to or as a result of or
incurred by ▇▇▇▇▇ Team members, or amounts for Part
transportation, including shipping, insurance or duty costs,
or the amounts due to MANUFACTURER's outside packagers, each
of which shall be paid directly by MANUFACTURER to the
applicable third party.
6.02 Other Costs. In the event that MANUFACTURER requires different or
additional services, MANUFACTURER shall be invoiced for such services
at the rates set forth in Exhibit 2.
6.03 Cost Improvements. TEREX, TDC and MANUFACTURER shall use their
commercially reasonable efforts in the ordinary course of business to
identify and implement productivity and other improvements to reduce
TDC's cost of distribution of the Parts, including all Warehousing
Services (as defined in Section 3 hereof), Computer Services (as
defined in Section 4 hereof), Accounting Services (as defined in
Section 5 hereof), and any additional services required by MANUFACTURER
as provided under Section 6.01. Commencing January 1, 1997, TDC and
MANUFACTURER shall share on a pro rata basis in any "Cost Savings" (as
such term is defined below) achieved by TDC in the distribution of the
Parts, with TDC to retain forty-six percent (46%) of the amount of the
Cost Savings and fifty-four percent (54%) of the Cost Savings to be
passed on to MANUFACTURER by means of a credit to the Base Fees payable
by MANUFACTURER under Section 6.01. TDC shall calculate the amount of
the Cost Savings on a quarterly basis, with any credit due to
MANUFACTURER to be applied against the Base Fee due for the second
month of the following quarter. For purposes of this Agreement, the
term "Cost Savings" shall mean the net reduction to TDC in the full
cost of distribution of the Parts, including the costs of all
Warehousing Services, Computer Services, Accounting Services and any
additional services provided under Section 6.01, calculated utilizing a
consistent accounting procedure agreed upon by the parties. The parties
shall mutually agree upon a method for calculating Cost Savings no
later than ninety (90) days from the date hereof. MANUFACTURER or its
designee shall have the right to audit all of TEREX's and TDC's books
and records relating to the distribution of the Parts at TDC, upon ten
(10) days advance written notice, for the purpose of confirming the
extent of any Cost Savings achieved by TDC, provided MANUFACTURER shall
not have the right to conduct such an audit more than twice in any
12-month period. In the event that MANUFACTURER or its designee should
find that TDC has not complied with the terms of this Section 6.03, TDC
shall promptly reimburse MANUFACTURER for the amount of any Cost
Savings due to MANUFACTURER, with interest calculated at 10% per annum,
from the date such Cost Savings would have been credited to the Base
Fee in accordance with the terms of this Section 6.03. The auditing
fees and expenses incurred by MANUFACTURER or its designee shall be
borne by MANUFACTURER.
6.04 Transfer. In the event MANUFACTURER does not elect to renew this
Agreement, TDC shall upon request, without any additional expense to
MANUFACTURER, (i) extract all data and information in the format in
which such data and information exists on TDC's systems and provide
such data and information to MANUFACTURER, and (ii) pack all of
MANUFACTURER's Products in storage at TDC's facility and prepare such
Products for shipment to a location designated by MANUFACTURER,
including marking each package with the part number and quantity, and
(iii) load MANUFACTURER's Products onto truck or other vehicles
provided by MANUFACTURER for transport. The fees set forth in this
Section 6 are exclusive of any other transfer costs, including, without
limitation, the freight cost of transporting Products to MANUFACTURER's
facility. Upon request, TDC shall prepare a written quotation for
converting MANUFACTURER's data and information to a format compatible
with MANUFACTURER's system at TDC's actual cost and other transfer
services excluded from the fees set forth in this Section 6.
Section 7. Control and Rights of Parties.
7.01 Independent Contractor Status. Neither TDC nor its employees shall
be deemed to be agents or employees of MANUFACTURER. It is understood
and agreed that TDC is an independent contractor acting for its own
account. Other than as expressly set forth herein or as approved in
writing by MANUFACTURER, TDC is not granted any express or implied
right or authority to assume or create any obligation or responsibility
on behalf of or in the name of MANUFACTURER or to bind MANUFACTURER in
any manner whatsoever. MANUFACTURER is interested only in the results
obtained under this Agreement; the manner and means of conducting the
work are under the sole control of TDC. None of the benefits provided
by MANUFACTURER to his employees, including, but not limited to,
compensation insurance and unemployment insurance, are available from
MANUFACTURER to the employees, agents or servants of TDC. TDC will be
solely and entirely responsible for his acts and for the acts of its
agents, employees, servants and subcontractors during the performance
of this Agreement. MANUFACTURER shall be solely responsible for its
acts and for the acts of its agents, employees, servants and
subcontractors, including, without limitation, the ▇▇▇▇▇ Team members,
during the performance of this Agreement.
7.02 Employment of Workers by TDC. TDC shall furnish duly qualified and
trained personnel to carry out the services to be provided under this
Agreement, and shall, at all times, enforce strict discipline and
maintain good order among the workers performing the work, and shall
cause the workers to observe all reasonable fire prevention, safety and
health regulations in force at TDC's facility. MANUFACTURER shall use
best efforts to ensure that members of the ▇▇▇▇▇ Team observe all such
regulations in force at TDC's facility.
Section 8. Insurance.
8.01 General. TDC shall obtain and maintain insurance during the term
of this Agreement with solvent and reputable insurance carriers of such
types and in such amounts as is customarily maintained by prudent
businesses, including, but not limited to, business interruption,
public liability, fire and extended coverage, automobile and workers'
compensation coverage and shall provide MANUFACTURER, at least annually
upon request, with a certificate of insurance issued by the relevant
carrier(s) as to the types and amounts of such insurance which TDC then
has in effect. TDC shall name ▇▇▇▇▇ as an additional insured to TDC's
business interruption insurance. The cost to TDC of maintaining the
insurance required by this Section 8.01 is included in the Base Fees.
Section 9. Duration and Termination.
9.01 Term. The "Term" of this Agreement shall be for thirty-six (36)
months commencing on the date hereof and expiring on November 30, 1999,
unless earlier terminated for default in accordance with Section 9.02.
9.02 Early Termination. This Agreement shall terminate automatically
and without further action by either party upon the occurrence of any
of the following events:
(a) TDC or MANUFACTURER becomes insolvent or involved in
receivership, bankruptcy or other insolvency or debt relief
proceedings, whether voluntary or involuntary, or indicates
(or its accountants indicate) that a substantial doubt
exists as to its ability to continue as a going concern; or
(b) upon one hundred twenty (120) days' written notice to
the other party, if such other party (i) materially breaches
any material monetary term of this Agreement and such breach
or failure is not remedied within ten (10) calendar days
after notification thereof by the terminating party or (ii)
fails to fulfill any of its non-monetary obligations under
this Agreement and such breach or failure is not remedied
within sixty (60) days after notification thereof by the
terminating party.
Section 10. Indemnification.
10.01 Indemnity Provisions. MANUFACTURER shall defend, indemnify, and
hold harmless TDC from and against any and all claims, damages, losses
and expenses, including without limitation, attorneys' fees, that may be
asserted against TDC and related to the design, manufacture, material
content or use of any MANUFACTURER products. MANUFACTURER further agrees
to defend, indemnify, and hold harmless TDC from and against any and all
claims, damages, losses and expenses, including without limitation,
attorneys' fees related to the procurement or sale of MANUFACTURER
inventories, except where such liability results from the gross
negligence of TDC, in which case TDC agrees to hold MANUFACTURER
harmless from any such liability to third parties. In no event shall TDC
be liable for any loss of profit incurred by MANUFACTURER or any other
party as a result of the telecommunications circuits or data processing,
including data base information or processing programs, except as
specified in this Agreement. TDC shall defend, indemnify and hold
harmless MANUFACTURER from and against any and all claims, damages,
losses and expenses, including, without limitation, attorneys' fees,
that may be asserted against MANUFACTURER by a third party, for any
willful or grossly negligent acts or omissions of TDC in the performance
by TDC's officers, agents, employees or subcontractors of TDC's
obligations hereunder.
10.02 MANUFACTURER Responsibility. MANUFACTURER is solely responsible
for complying with state and federal product "right to know" disclosures
as it relates solely to MANUFACTURER inventory and agrees to hold TDC
harmless from any liability to third parties directly related to the
failure of MANUFACTURER to observe such laws or regulations in
connection therewith. MANUFACTURER shall provide TDC with the
appropriate information required by these laws or regulations.
10.03 Other Damages. In no event shall either party be liable to the
other party for any indirect damages including consequential,
incidental or special damages or loss of profit.
Section 11. Trademarks and Trade Names. MANUFACTURER grants to TDC the
nonexclusive, personal, and nontransferable right to use MANUFACTURER's
trademarks and trade names solely to the extent necessary to enable TDC to
comply with its obligation hereunder but only in accordance with the terms of
this Agreement. TDC shall not use such marks or names or any other trademark or
trade name now or hereafter used by MANUFACTURER as part of any corporate title,
business identity or trade name or any similar ▇▇▇▇ or name without
MANUFACTURER's prior written consent nor make use thereof in any manner likely
to lead to confusion or in any way deceive the public or be injurious to
MANUFACTURER . TDC agrees that all such trademarks and trade names are and shall
remain the sole and exclusive property of MANUFACTURER and that upon termination
or expiration of this Agreement, TDC shall immediately cease any use thereof and
shall not thereafter, either directly or indirectly, use such trademarks and
trade names.
Section 12. Confidentiality. TDC acknowledges that MANUFACTURER may make
available to TDC valuable know-how, technical or other proprietary information
with respect to the sale, distribution and servicing of Parts as well as
promotion and advertising know-how and sales and merchandising information. TDC
undertakes to ensure that its employees, if any, will keep such information and
know-how confidential during and after the term of this Agreement.
Section 13. Force Majeure. Neither party shall be responsible to the other party
for the performance of any obligation to be performed under this Agreement due
to any cause beyond the control of or occurring without fault of such party,
including, but not limited to, acts of God, fires, floods, storms, riots,
strikes, lockouts, other national calamities, wars, insurrections or any other
occurrence, including governmental action, which would act to delay or interrupt
implementation and continuation of the performance of this Agreement. If there
is a delay of more than six (6) months due to any cause beyond the control of
one party, then either party may by notice to the other terminate this
Agreement.
Section 14. Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be sufficiently given if sent by
facsimile (confirmed in writing) or internationally recognized overnight
delivery service, prepaid, addressed as follows:
To MANUFACTURER:
▇▇▇▇▇ MATERIAL HANDLING COMPANY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
CITICORP VENTURE CAPITAL LTD.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To TDC:
TEREX WORLDWIDE PARTS DISTRIBUTION CENTER
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
TEREX CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President and General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Other addresses as may from time to time apply shall be furnished by a like
notice by either party during the term of this Agreement. Any notice or
communication shall be deemed effective when actually delivered (or the next
business day if delivered after regular business hours or on a Saturday, Sunday
or holiday).
Section 15. No Waiver of Rights. The failure of either party to require
performance at any time by the other party of any obligation under this
Agreement shall not affect the right to require performance of that obligation
at any time thereafter. No waiver of any breach of any provision of this
Agreement shall be construed as a waiver of any continuing or succeeding breach
of such provision or a waiver or modification of any other rights or remedies
that such party may have under this Agreement.
Section 16. Assignment. Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by either party hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party, except that TDC may assign any and all of its rights and obligations
under this Agreement to any entity controlling, controlled by or under common
control with TEREX or to the purchaser of all or substantially all of the assets
or business of TDC without the consent of MANUFACTURER. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 17. Integration. This Agreement contains the entire understanding of the
parties hereto and supersedes all prior or contemporaneous agreements, oral or
in writing, with respect to the subject matter hereof. This Agreement may not be
amended nor any provision waived without a written agreement signed by the party
against whom such amendment or waiver is sought to be enforced.
Section 18. Severability. If and to the extent that any court of competent
jurisdiction holds any provision of this Agreement or part thereof invalid or
unenforceable, such holding shall in no way affect the validity of the remainder
of this Agreement.
Section 19. Governing Law and Choice of Forum. This Agreement shall be governed
by and interpreted in accordance with the laws of Mississippi exclusive of its
conflicts of law provisions. Any actions, suits or legal proceedings of any
nature arising out of or relating to this Agreement shall be initiated in the
courts of Mississippi.
IN WITNESS WHEREOF, this Agreement is executed, in counterparts, by
authorized representatives of MANUFACTURER and TDC.
TEREX DISTRIBUTION CENTER, a
division of TEREX CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ MATERIAL HANDLING COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
EXHIBIT 1
TEREX DISTRIBUTION CENTER
PERFORMANCE OBJECTIVES
The performance levels listed in this Exhibit reflect MANUFACTURER's Parts
business service objectives and form the standards against which the TDC
performance is to be measured.
A. Putaway and Update Requirements
o Normal materials putaway = 5 workdays after TDC receipt.
o N.P.O. (No Purchase Order), N.P.N. (No Part Number) and N.S.C. (No
Standard Cost) shall be processed in accordance with MANUFACTURER's
instructions within 48 hours following MANUFACTURER's notification of
disposition to TDC.
NOTE: Attainment of the above objectives assumes unrestricted flow of
inbound material. TDC will advise MANUFACTURER of any non-controllable
event which might extend inbound performance objectives.
B. Outbound Order Processing (Level of service is determined by the customer
per the purchase order.)
o Code I orders transmitted to the TDC facility between 7:00 a.m. and
7:00 p.m. (Central Time), Monday through Friday, shall be shipped same
day at the departure time of designated or available
carrier/transportation.
o Code II orders transmitted to the TDC facility between 7:00 a.m. and
7:00 p.m. (Central Time) shall be shipped the day following receipt of
order transmittal by customer designated carrier.
o Code III orders transmitted to the TDC facility between 7:00 a.m. and
7:00 p.m. (Central Time), Monday through Friday, shall be shipped
within three (3) working days of receipt of the customer's release
date.
C. Control and Accounting for Inventory Assets
TDC shall provide levels of control and security over inventory assets
under its care consistent with ▇▇▇▇▇ accounting guidelines in effect as of the
date hereof. The parties agree that in a volume related aftermarket parts
business, a certain level of inventory shrinkage is normally accepted as a "cost
of doing business" for which appropriate financial reserves are established.
MANUFACTURER shall be responsible for inventory gain or loss due to
shrinkage to the extent of one percent (1%) of the standard gross cost of goods
sold for the twelve (12) months prior to the annual inventory. TDC agrees to be
responsible for inventory variations in excess of one percent (1%) of the
standard gross cost of goods sold provided that and subject to the following:
a. For the purposes of applying the formula, the following definitions
will be used:
Base = [1%] x [12-month gross cost of sales]
- If physical inventory loss (Loss) exceeds the Base:
Penalty = Loss - Base
- If physical inventory loss is less than Base, or if there is
a physical inventory gain (Gain):
Cushion = Base - Loss or Base + Gain
b. A "cushion" can be carried forward up to two years to reduce or offset
"penalties" otherwise owed to MANUFACTURER.
c. A "penalty" paid to MANUFACTURER can be recovered by TDC for up to two
years for amounts up to subsequent "cushions."
EXHIBIT 2
SCHEDULE OF SERVICE FEES
The fees set forth in this Exhibit 2 are for services not included in the Base
Fees. The Actual Hourly Cost shall be calculated by first, multiplying the
applicable employee's hourly rate ($9.60 through May 1997 and probably three to
four percent (3%-4%) higher for the balance of 1997) times 1.5 (the overtime
rate) and second, multiplying the total calculated in the first step by 1.33
(the fringe rate) and third, by multiplying the total by the actual time spent
performing the function. The Actual Hourly Cost does not include any management
supervision costs, which costs are included in the Base Fees.
Special Charges:
Special Packing = Actual Hourly Cost plus material
Return to Stock
Canceled Order -- Not Invoices = Actual Hourly Cost
Canceled/Returned Order--Invoiced = $ 5.00/line plus freight
Rework = Actual Hourly Cost
Teardowns = Actual Hourly Cost
Kit Assembly = $ .10/piece in kit plus
($10 minimum per Kit run) = $ .25/pound
Detailed materials inspection = Quoted
Scrap destruction/defacing = Quoted
Misc. Office/Whse Supplies = Quoted
Priority Carriers = Per carrier invoice
Manual Shippers = Actual Hourly Cost
EXHIBIT 3
TDC SYSTEM SERVICES
DATA CENTER SERVICES
* PRODUCTION JOB SCHEDULING
* SPECIAL JOB REQUESTS
* TAPE PROCESSING/DISTRIBUTION
* FORMS MANAGEMENT
* REPORT DISTRIBUTION
* SYSTEM TABLE UPDATING
* COORDINATE PROBLEM RESOLUTION RELATED TO EQUIPMENT
(TERMINALS/PRINTERS), TELECOMMUNICATIONS AND HOST
TDC SYSTEM SERVICES
SYSTEM SUPPORT AND DEVELOPMENT
* PROBLEM DETERMINATION AND RESOLUTION
* SYSTEM ANALYSIS, DESIGN & PROGRAMMING
* PROJECT MANAGEMENT/REPORTING
* EASYTRIEVE SUPPORT
* TECHNICAL CONSULTING
TDC SYSTEM SERVICES
SYSTEM FEATURES
* INTEGRITY/RECOVERY
- RECOVERY OF DATA DUE TO HARDWARE/SOFTWARE FAILURE
- ROLLBACK FOR TRANSACTION/PROGRAM ABNORMAL TERMINATION
- RECOVERY OF DATA TO PREVIOUS DAY CLOSING IN MAJOR DISASTER
* DATABASE ACCESSIBILITY
- IDIMS
- ONLINE (CICS), BATCH
- SIMULTANEOUS BATCH AND ONLINE UPDATE WITH FULL INTEGRITY
- READ ONLY ACCESS USING EASYTRIEVE
* PRODUCTION DATABASE
* EASYTRIEVE COPY DATABASE (WEEKLY COPY)
- DATABASE MONITORING/TUNING
* ONLINE STORAGE (DASD) MANAGEMENT (CA-1)
* TAPE MANAGEMENT (CA-1)
* INTEGRATED SYSTEM NETWORK ARCHITECTURE
- ABILITY TO COMMUNICATE WITH OTHER TDC SYSTEMS
* PERFORMANCE MONITORING
* SYSTEM SOFTWARE/HARDWARE INSTALLATION/MAINTENANCE
* PROBLEM DETERMINATION/COORDINATION
* SALES COST ACCOUNTING
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
SALES ORDER PROCESSING
SALES ORDER ENTRY
* INTERACTIVE
- CODE I-3
- EXPORT
- INTER/INTRA COMPANY
* BATCH
- FUTURE
- QUOTATIONS
* TABLE DRIVEN ORDER CODING VERIFICATION
* VARIABLE PRICING (DOMESTIC, CANADIAN, EXPORT)
- NET
- LIST
- OEM
- QUOTES
- TRANSFER
FACTOR PRICING IN FUTURE
* REALTIME INVENTORY REDUCTION
* EXPEDITING REPORT GENERATION
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
SALES ORDER PROCESSING
* SHIPPING/PICK TICKET GENERATION
* SHIPPER ADJUSTMENTS
- SHORT SHIPMENTS
- EXPORT AND OEM PRICE REQUIREMENTS
- COMPLETE CANCELS
- SHIPPING INFORMATION
* SALE ORDER INQUIRY
* SALE ORDER CHANGES
- NON-RELEASED CANCELLATIONS (ORDER/PARTIAL QUANTITIES/LINES)
- DUE DATE CHANGES
- SET-UPS (NEW PARTS; ASSEMBLY/COMPONENTS)
- CONTROLLED RELEASES
* TABLE DRIVEN BACK ORDER TO RELEASE
* SALE ORDER COMBINATION FACILITY (STOCK/FUTURES)
* HISTORY BY SALE ORDER CODE/LINES DAILY/MONTH-TO-DATE
- ABC CLASSIFICATION
- BACK ORDERED
- BOOKINGS
- RELEASED, NOT SHIPPED
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
SALES ORDER PROCESSING
* INVOICING
- DOMESTIC/CANADIAN/EXPORT/COST
- MISCELLANEOUS CHARGES
FREIGHT
SALES TAX
TRADE DISCOUNT
RUSH SURCHARGE
PACKING
HANDLING
- AUDIT TRAIL OF BILLING
- INTERACTIVE /BATCH
* REPORTS
- INVOICE REGISTER
- TRANSMISSION STATISTICS OF ACCOUNTS RECEIVABLE
- OPEN ORDERS
- RELEASES PENDING
- CANCELLATIONS
- MANAGEMENT INFORMATION
(COMPANY/ DIVISION/SALES DEPARTMENT)
- PRICE /COST NOTIFICATIONS
- STOCK ROOM BACK ORDERS
- INVENTORY
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
PRICING
* PRICING MAINTENANCE
- DOMESTIC/CANADIAN/OEM/EXPORT
- MARKET LEVEL
- COMPETITIVE PARTS
- PROPRIETARY
- ASSEMBLY/COMPONENTS
- MASS UPDATE (BATCH ONLY)
BY- PRODUCT IDENTIFICATION CODE
* PRICING FREE TEXT:MAINTENANCE
- MATERIAL
- SIZE
- WEIGHT
- MODEL
* PRICE/COST HISTORY
* PRIOR 48 MONTHS SHIPPED QUANTITIES
* PRODUCT LEVEL PRICING
* PRICE ACTIVATION/INACTIVATION
* COMPETITOR MAINTENANCE
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
PRICING
* REPORTS
- SIMULATION OF PRICE CHANGES
- VALIDATION OF CHANGES PERFORMED
- PROJECTION/PROFITABILITY ANALYSIS
- PRICE BOOK PUBLICATIONS
- DOMESTIC
- CANADIAN
- EXPORT
- WEIGHTED AVERAGE OF NEW TO OLD PRICE CHANGES
- ESTIMATED PRICE AGING ANALYSIS
- COMPETITOR ANALYSIS
- PRICING FREE TEXT
* COMPLETE INQUIRY OF ABOVE FEATURES
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
SALES FORECASTING (ASI)
* FORECASTING
- AUTO REGRESSION
- EXPONENTIAL SMOOTHING
- CYCLICAL VARIATION
- SEASONALITY
- DEVIATION ERROR TRACKING
* MODEL VARIATION
- SEASONAL
- PATTERNED IRREGULAR
- NON-PATTERNED IRREGULAR
* EIGHTEEN (18) FUTURE PERIODS OF FORECAST
* PARAMETER DRIVEN
- DEMAND FILTERING
- TREND SMOOTHING
- PERMANENT COMPONENT
- SEASONALITY SMOOTHING
- MEAN AND AVERAGE DEVIATION TRACKING
- TREND DAMPENING
- SYSTEM LEVEL FORCING
- FORECAST OVERRIDES
- TWENTY-SEVEN (27) ITERATIONS
- MODEL SWITCHING
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
CREDIT ADMINISTRATION
* ONLINE INQUIRY
* CREDIT/DEBIT ENTRY (BATCH ONLY)
- DOMESTIC/CANADIAN/EXPORT
* DEALER YEARLY RETURNS
* PARTS DISCREPANCY
* REPORTS/FORMS
- RETURN AUTHORIZATION
- RETURN MATERIAL
- MOVE TAG
* TRANSMISSION OF ACCOUNTS RECEIVABLES
* AUDIT TRAIL (60 DAYS ONLINE)
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
DISTRIBUTION REQUIREMENTS PLANNING (ASI)
* TIME PHASED REQUIREMENTS PLAN BASED ON INVENTORY TURN RATIOS AND
CUSTOMER SERVICE LEVELS BY STRATA
* RECOMMENDS EXPEDITE/DE-EXPEDITE ACTION WITHIN THE FREEZE PERIOD
* AUTOMATICALLY RESCHEDULES RELEASED OUTSIDE FREEZE PERIOD
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
PURCHASING
* ONLINE VENDOR FILE MAINTENANCE
* ONLINE PURCHASE ORDER GENERATION/MAINTENANCE
- FIXED QUANTITY
- BLANKET
* DETERMINES BEST QUANTITY AND COST BASED ON EOQ AND VENDOR PRICE BREAKS
* PROHIBITS AUTOMATIC PURCHASE ORDER GENERATION BASED ON SPECIFIC
MANAGEMENT CRITERIA VIA SYSTEM TABLES AND PRODUCES PURCHASE
ORDER CHECKLIST FOR REVIEW AND ACTION
* ONLINE CHECKLIST MAINTENANCE
* AUTOMATIC PURCHASE ORDER GENERATION BASED ON CURRENT INVENTORY POSITION
AND MANAGEMENT CONTROL PARAMETERS
* RECOMMEND BUY HISTORY
* PURCHASE ORDER ACTIVITY AUDIT TRAIL
* EXPEDITE ANALYSIS REPORTING
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
RECEIVING
* ONLINE RECEIVING AT PACKAGERS
* MOVE TAG AND RECEIVING LIST GENERATION
* ONLINE PUTAWAY FUNCTION
* INTERACTIVE UPDATES TO INVENTORY POSITION AND UNAUDITED DATA
* INTERACTIVE SALE ORDER ALLOCATION/RELEASE
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
ACCOUNTS PAYABLE
* ACCOUNTS PAYABLE INVOICE PROCESSING - BATCH/ONLINE
- DOMESTIC
- FOREIGN
* MECHANICALLY CREATES PENDING INVOICE DATA BASE TRANSACTIONS FOR
UNMATCHED RECEIVINGS
* MATCHED INVOICE PAYMENT INFORMATION TRANSMITTED DAILY AND BATCH REPORT
PRODUCED
* ONLINE INVOICE AND VARIANCE INQUIRY/MAINTENANCE
* DAILY CONTROL REPORTING
- AUTOMATIC VENDOR DEBIT ON OVERBILL
- PASSED LIST
- EXCEPTIONS
* MONTHLY CONTROL REPORTING
- VARIANCES RECAP
- MATERIAL RECEIVED, NOT INVOICED
- MATERIAL IN TRANSIT
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
INVENTORY CONTROL
* CALCULATES INVENTORY STANDARDS
- EOQ:ECONOMIC ORDER QUANTITY
- SS: SAFETY STOCK
* MANAGES INVENTORY THROUGH THE STRATIFICATION OF MATERIAL BASED ON
STANDARD COST EXTENDED, TIMES ORDERED, AND PIECES ORDERED
* INVENTORY BUILDUP PLAN THAT IS CONSISTENT WITH MANAGEMENT SPECIFIED
GOALS (I.E., SERVICE LEVELS AND TURN RATIOS)
* EVALUATION OF THE CALCULATED PLAN VS THE ACTUAL PLAN
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
CYCLE INVENTORY
* RECOUNT SELECTION (TABLE DRIVEN - DOLLAR VALUE)
* INTERACTIVE POSTING
- COUNTS
- ADJUSTMENTS
* ONLINE INQUIRY
* POSTING CYCLE COUNTS
- AUTOMATIC RELEASE/BACK ORDER DEPENDENT ON INVENTORY STOCK
POSITION CHANGE (+ OR -)
* REPORTS
- INVENTORY EVALUATION/COUNTS
- STATISTICAL ANALYSIS
- ROW COUNTS
- LOCATION SUMMARY
- RECOUNT SELECTION
- PHYSICAL INVENTORY RECAP
- CYCLE ADJUSTMENT
* GENERATION OF DATA AND OTHER INFORMATION REQUESTED BY EXTERNAL
AUDITING FIRM
TDC SYSTEM SERVICES
APPLICATION FUNCTIONALITY
STANDARD COSTS
* ABILITY TO REQUEST/ACCEPT STANDARDS FROM MANUFACTURING PLANTS
* LOAD AND ANALYZE NEW STANDARDS RECEIVED
* NEW STANDARDS-VENDOR (NON-TDC MANUFACTURING) SOURCED MATERIAL
- PURCHASE ORDER COST
- INVOICE COST
- VENDOR PRICE BREAKS
* ONLINE MAINTENANCE AND EDIT CHECKS FOR EXCEPTION CONDITIONS STANDARDS
ANALYSIS
- INCREASES/DECREASES
- DOLLARS
- PERCENTAGES
* NEW STANDARD APPLICATION
- COST HISTORY
- PREVIOUS COST
- YEAR COST SET
* INVENTORY, COMMITMENT AND OPEN SALE ORDER RECONCILIATIONS
* REPORTS
- INVENTORY COUNTS/EXCEPTIONS
- STANDARDS ANALYSIS
- ASSEMBLY/COMPONENT BUILDUP
- UNAUDITED LIST
- AREA COUNTS
Schedules Omitted