Exhibit 10.9
EXHIBIT J
INTERIM ADMINISTRATIVE SERVICES AGREEMENT
This Interim Administrative Services Agreement ("Agreement"), dated as of
__________, 2000 (the "Effective Date"), is made between Applied Power Inc., a
Wisconsin corporation, with offices at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("API"), and APW North America Inc., a Delaware corporation ("APW North
America") which will ultimately become a wholly owned subsidiary of APW LTD., a
Bermuda corporation ("APW"), with offices at N22 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The term "APW" when used in this agreement
means APW and its subsidiaries listed on Schedule 1, which generally constitute
the electronics business (collectively, "Electronics Business"). The term "API"
means API and its subsidiaries, exclusive of APW as listed on Schedule 2.
WHEREAS, the Electronics Business was one of API's segments until the
Effective Date when it was spun off as a separate and independent company, APW
(the "Spin-off");
WHEREAS, APW will operate the Electronics Business as a separate publicly
traded company and API will continue to operate its industrial business
("Industrial Business");
WHEREAS, prior to the Spin-Off, API provided certain limited support
services to its Electronics Business and Industrial Business;
WHEREAS, APW North America, a U.S. subsidiary of APW, acquired certain
corporate office functions of API and, as set forth herein, APW has acquired
certain subsidiaries of API used to provide certain support services to the
corporate headquarters and each party will provide limited support services to
other party on an interim basis; and
WHEREAS, API desires and APW North America is willing to provide certain
administrative and support services (as herein defined) for API's operations for
certain specified interim periods after the Spin-off solely for purposes of
assisting API in the transition. Further, one of API's subsidiaries will
provide certain information technology services to APW North America and other
subsidiaries of APW North America and one of API's European facilities will
provide certain administrative services to an APW subsidiary upon APW's request.
NOW, THEREFORE, in consideration of the promises set forth herein, the
parties do hereby agree as follows:
1. Services.
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(a) Subject to the terms and conditions provided herein, APW North
America shall provide API with Services on an interim basis, consisting of:
(i) "Tax Services" shall mean tax preparation of the return and tax
compliance matters.
(ii) "Insurance/Risk Management Services" which shall mean the
procurement and renewal of property, casualty and related
insurance policies and the administration of claims and rights.
(b) Subject to the terms and conditions provided herein, API and its
subsidiaries shall provide APW and its subsidiaries with certain Services as
defined below:
(i) "Veenendaal Support" which shall mean administrative services
offered by API's subsidiary Enerpac Europe B.V. as presently
conducted. These services include invoicing, preparing purchase
orders, tracking of inventory, warehousing, shipping, Oracle
systems support, inventory storage and other general
administrative services currently provided as of the date of
this agreement at Veenendaal, Holland to support APW's ▇▇▇▇▇▇
Line operations.
(ii) "Computer and Financial Support" which shall mean computer and
financial support for the corporate headquarters and related
Electronics Business as currently provided by the Industrial
Business Glendale, Wisconsin facility. Such financial services
shall include the payroll processing, credit support for
receivables, fixed asset listing and human resources services
currently provided to corporate and other Electronics
Businesses as currently provided.
2. Agreement Principles and Guidelines. By this Agreement, API, APW North
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America and APW seek to implement the general principle that with the exceptions
noted herein or in the Contribution Agreement, Plan and Agreement of
Reorganization and Distribution including any Schedules, Exhibits or Annexes
thereto ("Contribution Documents"), each party will provide Services on an
interim basis similar to those previously offered to the other party while it is
not reasonably feasible for API, APW North America or APW, as the case may be,
to provide independently such Services itself. Each party will continue to
offer Services in the same or similar magnitude as previously offered to the
other party and by this Agreement does not promise, covenant, or agree to
provide a greater level or magnitude of Services. Each party acknowledges and
covenants to use reasonable efforts to independently provide such Services for
itself as soon as
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reasonably feasible. If reasonably feasible, each party will provide such
Services for itself, prior to the term limits set forth in Section 4 of this
Agreement. Each party hereby acknowledges that the requirement for the other
party to use reasonable efforts to independently provide such Services as soon
as reasonably feasible is a material element and condition to this Agreement and
that failure to fully comply with such provision will give rise to, among other
provisions, the termination rights set forth in Paragraph 16(e) of this
Agreement. Nothing in this Agreement shall be construed to cause APW North
America or API to become a service bureau or to perform a Service which it
cannot provide (i) without conflict with a third-party contract to which APW,
APW North America or API is a party or (ii) a breach of any third-party contract
to which APW, APW North America or API is a party. In no event will APW, APW
North America or API be responsible for any damages if it is unable to offer or
continue to provide a Service to the other party pursuant to this paragraph.
3. Fees and Additional Charges. The parties agree to pay for the Services
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the amounts respectively shown on Schedule 3 hereto.
(a) Additional Charges. In addition to the charges set forth above,
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API or APW North America, as the case may be, agrees to pay for any
manufacturers, sales, use, excise, personal property, or any other tax or
charge, or duty or assessment cost, expense, or fee attributable to the
execution or performance of any Service pursuant to this Agreement, except (i)
any income, franchise, doing business or similar taxes levied or assessed on or
based on such party's income, capital stock or other similar base, and (ii)
employment taxes with respect to employees of such party (including, but not
limited to, unemployment taxes, social security taxes and income tax
withholdings). Each party also agrees to pay any fee, expense, or charge
associated with obtaining consents from any party other than such party to
utilize software or other contracts necessary to offer any Service under this
Agreement. Each party also agrees to reimburse the other party for its
reasonable out-of-pocket expenses directly attributable to the provision of
Services hereunder.
(b) Terms of Payment. Each party shall pay the other party's fees and
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any additional charges owed within fifteen (15) days of invoice. Each party
shall also pay any collection fees and reasonable attorneys' fees incurred by
the other party in collecting payment of the charges and other amounts for which
such party is liable under the terms and conditions of this Agreement. Without
limiting the foregoing, if one party is more then two months in arrears on any
payment, the other party may terminate this Agreement pursuant to the provisions
of Paragraph 16(e).
4. Term. This Agreement shall be effective upon __________, 2000 or such
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other date as agreed upon by the parties ("Effective Date"). Subject to the
requirement set forth in Section 2 that each party must use reasonable efforts
to independently provide such Services when reasonably feasible, the respective
periods Services offered by API or APW North America will be for a six-month
term.
Each party, at its sole discretion, and upon request of the party at
least 30 days prior to termination of any Service Period, may extend the term
date for an additional period not greater than
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six months. Such Services will then be offered at a rate of up to 200% of the
billing rate in effect at such time, subject to any subsequent adjustment
pursuant to Section 3 of this Agreement.
5. Subsidiaries. To the extent such Services were previously provided to
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subsidiaries of API or APW, as the case may be, all Services shall be included
as part of the Services provided under this Agreement and shall be done in
accordance with the terms and conditions of this Agreement. API and APW each
agree that each are responsible for assuring compliance with the Agreement by
its subsidiaries and further agrees to be responsible for the compliance with
its subsidiary's obligations in order to allow the other party to offer the
above described Services.
6. Equipment. API, at its own cost, shall obtain and maintain such data
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processing, computer and communications equipment as may be necessary or
appropriate to facilitate the proper use and receipt of the Services set forth
in this Agreement. API will be permitted access to any APW North America
equipment or property in order (i) to provide maintenance, repair or updates, or
(ii) to remove such equipment listed on its accounting records, if appropriate,
or (iii) to respond to any reasonable request related to APW's equipment. There
will be no charge for API's right to enter APW North America's property.
7. Systems Modification; Amendment of Services. Each party, at its sole
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discretion, may modify, amend, enhance, update or provide an appropriate
replacement for any of the Services offered by this Agreement, the software used
to provide the Services or any element of its systems (hardware or software) at
any time.
8. Insurance and Bonds.
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(a) Fidelity Bonds. At either party's request, the other party shall
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obtain, at the requesting party's expense, fidelity bond coverage for the
employees who provide Services hereunder.
(b) Insurance. Throughout the term of this Agreement, each party may
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maintain insurance coverage for losses from fire, disaster and other causes
contributing to interruption of the Services. The proceeds of any such
insurance shall be payable to the party contracting for such insurance. Nothing
in this Agreement shall be construed as to permit the other party to receive any
of such proceeds, or to be named as an additional loss payee under any such
insurance policy.
9. Responsibility.
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(a) General. API and APW North America agree to perform the Services
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in a reasonable manner, which is similar to services the party provides for its
own operations, and assumes no other or higher degree of care. In connection
with providing Services, API and APW North America acknowledge that it is a
reasonable manner for the party to mail items or documents to the other party,
provided that any party may request documents or items to be delivered via
messenger, at the requesting party's cost. Except as specifically provided
herein, the party assumes no other obligations as to performance, timing or
quality of the Services provided under this
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Agreement; all risks of error are expressly and solely assumed by the party
receiving Services and the party providing Services shall not be responsible for
loss or damage due to delays in providing the Services under this Agreement. NO
PARTY WILL IN ANY EVENT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES INCURRED BY API INCLUDING, BUT NOT LIMITED TO, LOST PROFITS OR BUSINESS
OPERATION LOSS, REGARDLESS OF WHETHER THE PARTY WAS ADVISED OF THE POSSIBLE
OCCURRENCE OF SUCH DAMAGES. API shall be required to maintain throughout the
term of this Agreement, off-site disaster recovery capabilities which permit API
to recover from a disaster and continue providing Services to APW North America
within a commercially reasonable period.
(b) Reliance on the Party. In connection with the foregoing, API and
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APW North America agree that the other party and its employees will have a
significant impact on the timing and quality of the performance of the Services
offered. API and APW North America will each provide those Services described
in this Agreement on the basis of information and/or instructions furnished by
the other party. Each party shall be entitled to rely upon any such data,
information, or instructions as provided by the other party. If any error
results from incorrect input supplied by a party, such party shall be
responsible for discovering and reporting such error and supplying the
information or instruction necessary to correct such error to the other party.
Each party may rely upon any instrument, signature, instruction or telephone
call from any employee of the other party as to Services requested under this
Agreement. In connection with providing such Services, neither party shall be
liable for any action taken or omitted by it in good faith and believed to have
been authorized by the other party or its employees.
10. Warranties. EXCEPT AS SPECIFICALLY DESCRIBED IN THIS AGREEMENT, EACH
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PARTY DISCLAIMS ALL OTHER WARRANTIES, WHETHER WRITTEN, ORAL, EXPRESSED OR
IMPLIED INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
11. Force Majeure. Each party shall not be liable to the other party if
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such party's fulfillment or performance of any terms or provisions of this
Agreement is delayed or prevented by revolution or other civil disorders, wars,
act of enemies, strikes, electrical equipment availability failures, labor
disputes, fires, floods, act of God, federal, state, or municipal action,
statute, ordinance or regulation, or, without limiting the foregoing, any other
causes not within its reasonable control, and which by the exercise of
reasonable diligence it is unable to prevent, whether of the class of causes
hereinbefore enumerated or not. In case of emergency, the party may also select
the order, timeliness, or availability of providing any Services to the other
party.
12. Employees. All employees of APW North America providing Services to
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API will continue to remain employees of APW North America and all employees of
API providing services to APW North America will remain employees of API.
13. Confidentiality. The parties recognize that the rendering of Services
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will be governed by the Confidentiality and Nondisclosure Agreement entered into
by the parties in connection with
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the Spin-off, except the confidentiality requirements of both parties will
survive for one (1) year after termination of the Services under this Agreement,
regardless of the reason for termination. In the event of any dispute concerning
confidentiality, the parties agree to utilize the provisions of Section 14.
14. Dispute Resolution Procedure.
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(a) General. Subject to the parties respective rights under Section
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16(e), in an effort to resolve informally and amicably any claim or controversy
arising out of or related to the interpretation or performance of this Agreement
without resorting to litigation, a party shall first notify the others of any
difference or dispute hereunder that requires resolution. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of API, APW and APW North America, respectively, or their
designated successor each shall investigate, discuss and seek to settle the
matter between them. If the two are unable to settle the matter within 30 days
after such notification (or such longer period as may be agreed upon), the
matter shall be submitted to another executive officer of API, APW and APW North
America, respectively, for consideration.
(b) Arbitration. If settlement cannot be reached through the efforts
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of the senior officers within an additional 30 days or such longer period as may
be agreed upon, API, APW and APW North America shall consider arbitration or
other alternative means to resolve the dispute.
(c) Legal Proceedings. If API, APW and APW North America are unable to
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agree on an alternative dispute resolution mechanism within the period provided
in Section 14(b), either party may initiate legal proceedings to resolve such
matter.
15. Precedence and Updating of Agreement. This Agreement is being executed
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contemporaneously with the Contribution Documents. To the extent the
Contribution Documents, or any other document or other agreement executed in
connection with the Contribution Documents, is in conflict with any term of
provision of this Agreement or any Exhibit to this Agreement, this Agreement
will take precedence. To the extent this Agreement is in conflict with any
Exhibit, the Exhibit will take precedence.
16. Miscellaneous.
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(a) Governing Law. This Agreement shall be construed in accordance
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with the internal laws of the State of Wisconsin.
(b) Limitations. Nothing in this Agreement is to be construed as an
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assignment or grant of any right, title or interest in any trademark, copyright,
design or trade dress or patent right.
(c) Parties in Interest. This Agreement may be assigned to a parent or
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subsidiary of a party, or to a third party acquiring substantially all of the
assets of a party, provided that prior to such assignment the other party has
granted its written consent to the assignment, and further
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provided that neither party may unreasonably withhold its consent to a request
for assignment. Except as provided above, this Agreement may not be assigned to
a third party.
(d) Entire Agreement. This Agreement and the Exhibits are the entire
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Agreement between the Parties in connection with the matters set forth herein.
This Agreement may only be amended in writing signed by both Parties.
(e) Termination.
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(i) APW or APW North America may promptly terminate this Agreement
upon written notice to API with cause for any material breach of this
Agreement by API, unless within a period of fifteen (15) days after
written notice API remedies the breach or proposes a course of action,
reasonably acceptable to APW or APW North America, to remedy the breach
within a reasonable time. API may promptly terminate this Agreement
upon written notice to APW or APW North America with cause for any
material breach of this Agreement by APW or APW North America, unless
within a period of fifteen (15) days after written notice APW or APW
North America remedies the breach or proposes a course of action,
reasonably acceptable to API, to remedy the breach within a reasonable
time. This Agreement will terminate automatically (to the extent
permitted by law at the time) in the event API files a petition in
bankruptcy, becomes insolvent, makes an assignment for the benefit of
creditors or an arrangement pursuant to any bankruptcy law, or
discontinues its business or has a receiver appointed for it.
(ii) Upon any termination hereunder, API will promptly pay any
charges or fees owed to APW North America. There will be no cost or
charge to APW North America or APW if either of them elects to
terminate this Agreement.
(f) Notices. All notices and communications required or permitted
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under this Agreement shall be in writing and any communication or delivery
hereunder shall be deemed to have been duly made if personally delivered, or if
mailed by first class mail, postage prepaid, or by air express service, with
charges prepaid and addressed as follows:
If to API: Applied Power Inc.
(must send to ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
both individuals ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
specified) Attention: Chief Financial Officer
If to APW North America APW North America Inc. or APW Ltd.
or APW Ltd. N22 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Either party may, by written notice so delivered to the other,
change the address to which future delivery shall be made.
(g) No Reliance. No third party is entitled to rely on any of the
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representations, warranties and agreements of the parties contained in this
Agreement. The parties assume no liability to any third party because of any
reliance on the representation, warranties and agreements of the parties
contained in this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers this _____ day of __________, 2000.
APPLIED POWER INC.
By:_____________________________________
President and Chief Operating Officer
APW LTD.
By:_____________________________________
President and Chief Executive Officer
APW NORTH AMERICA INC.
By:_____________________________________
Vice President
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