EXHIBIT 10
REVERSE LOGISTICS
MASTER SERVICE AGREEMENT
BETWEEN
WHIRLPOOL CORPORATION
AND
APPLIANCE RECYCLING CENTERS
OF AMERICA, INC.
REVERSE LOGISTICS MASTER SERVICE AGREEMENT BETWEEN
WHIRLPOOL CORPORATION AND
APPLIANCE RECYCLING CENTERS OF AMERICA, INC. (ARCA)
This Agreement entered this 8TH day of July 1998, ("Effective Date")
by and between WHIRLPOOL CORPORATION ("WHIRLPOOL"), a Delaware corporation,
having a principal place of business at ▇▇▇▇ ▇-▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and
Appliance Recycling Centers of America, Inc. (ARCA) ("VENDOR"), having a
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
WHEREAS VENDOR DESIRES TO PROVIDE CERTAIN REVERSE LOGISTICS
SERVICES TO WHIRLPOOL IN SUPPORT OF WHIRLPOOL'S BUSINESS AT VARIOUS
LOCATIONS AND WHIRLPOOL DESIRES TO HAVE VENDOR PROVIDE THESE SERVICES
FROM TIME TO TIME AT WHIRLPOOL'S DISCRETION, AND
WHEREAS, THE PARTIES WISH TO FORMALIZE THEIR WORKING
RELATIONSHIP WITH RESPECT TO SUCH SERVICES.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES
CONTAINED HEREIN AND IN CONSIDERATION OF THE TIME, MONEY AND EFFORT
WHICH WILL HE EXPENDED BY THE RESPECTIVE PARTIES UNDER THIS AGREEMENT,
THE PARTIES AGREE THAT SERVICES BE PROVIDED UNDER THE FOLLOWING TERMS
AND CONDITIONS:
1. DEFINITIONS
As used herein:
a) "SAF" is an acronym for "Service Authorization Form" which
forms the mutual agreement between Parties to undertake one or
more categories of reverse logistics services at one or more
locations. One or more Service Authorization Forms will be
appended to, and made a part of this Agreement.
b) "Contracts Administrator" means the key contact person for
each party relating to contractual issues and shall be as to
WHIRLPOOL:
▇▇▇ ▇▇▇▇▇▇▇▇▇
Whirlpool Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇, M/D ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and as to VENDOR:
▇▇▇▇ ▇▇▇▇▇▇▇, President
Appliance Recycling Centers of America, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or such other persons as may be designated by WHIRLPOOL or
VENDOR from time to time.
2. PROPRIETARY INFORMATION
a) In connection with proposed Services hereunder, it may be
necessary for WHIRLPOOL or its agents, subsidiaries and
consultants to disclose to VENDOR information which is not
generally known to WHIRLPOOL's customers or its competitors
("Proprietary Information"). All Proprietary Information
disclosed by WHIRLPOOL to VENDOR or which is visible or
audible to VENDOR by virtue of VENDOR having an employee,
subcontractor or agent visiting or performing services at a
facility controlled by WHIRLPOOL or one of its- subsidiaries,
agents or subcontractors, shall be considered confidential and
retained in confidence by VENDOR and its employees and shall
not be published or disclosed to any other person, firm or
corporation or used by VENDOR except as otherwise expressly
authorized by WHIRLPOOL, except for any such information:
i) which is already known to VENDOR at the time it
receives such information from the party disclosing
such information hereunder; or
ii) which is or becomes publicly known through no
wrongful act of VENDOR; or
iii) which VENDOR shall become required by law to
disclose, provided that VENDOR provides WHIRLPOOL
with prompt prior written notice of an opportunity to
contest such disclosure and discloses such
information only as and to the extent specifically
required by law.
b) VENDOR shall use the same degree of care to avoid publication
or dissemination of WHIRLPOOL Proprietary Information
disclosed hereunder as it employs with respect to its own
information which it does not desire to have published or
disseminated, but at all times shall use at least reasonable
care.
c) VENDOR agrees to disclose WHIRLPOOL Proprietary Information
only to those of its employees having a "need to know" and
further agrees to inform all such employees receiving such
information of its obligations under this Agreement.
d) The obligations of WHIRLPOOL and VENDOR shall apply to
disclosures during the term of this Agreement, and shall
survive the expiration, termination and cancellation of this
Agreement and continue as provided in Subparagraph A of this
Article 2.
3. SERVICES
a) WHIRLPOOL engages VENDOR as an independent contractor to
provide reverse logistics services ("Services") as may be
mutually agreed. The specific Services to be provided by
VENDOR are described in SAFs appended to this Agreement from
time to time.
4. SERVICE INITIATION
a) WHIRLPOOL may initiate one or more Services in a territory
designated in the applicable SAF by forwarding two copies of
applicable completed Service Authorization Form(s) signed by
an authorized representative of WHIRLPOOL One or more
Schedules may be attached to any SAF.
b) VENDOR agrees to consider in good faith such proposed Service
and, within the time period specified in the SAF, agrees to
notify WHIRLPOOL whether or not it agrees to undertake the
Service(s) proposed therein. VENDOR will indicate its
willingness to undertake such a proposed Service(s) by
returning to WHIRLPOOL a copy of the SAF signed by an
authorized representative, whereupon the Service proposed
therein shall become the basis of a specific Service
("Approved Service") and the terms and conditions set forth in
this Agreement shall apply.
c) In the event that VENDOR declines to participate in the
Service, neither party shall have any obligation concerning
such Service, and WHIRLPOOL may pursue such Service(s) with
any other company provided such service is not in violation of
the confidentiality obligations of or the conflict of interest
restrictions of this Agreement.
d) All parties agree to provide copies of all executed Service
Initiation Authorizations to the above named Contract
Administrators within ten (10) days of their execution.
e) Neither party is obligated to initiate or accept any proposed
Service. This Agreement is not intended to create an exclusive
relationship between WHIRLPOOL and VENDOR, but instead is
merely intended to provide a framework for defining the terms
and conditions applicable to any Approved Services which might
be entered into according to the terms of this Agreement.
Nothing in this Agreement, shall prevent either party from
entering into reverse logistics service agreements with other
companies provided such reverse logistics services are not in
violation of the confidentiality obligations or the conflict
of interest restrictions of this Agreement. Neither party is
required by this Agreement to first offer any projects to the
other party before offering such project to a non-party.
However, certain Services may be exclusive if so indicated on
the SAF.
5. APPROVED SERVICES
a) Following the initiation of each Approved Service, the parties
to the Approved Service shall use reasonable efforts to carry
out the objectives set forth in the SAF pertaining thereto
and/or as otherwise mutually established.
b) During the period set forth in each SAF resulting in an
Approved Service, the parties will use reasonable efforts to
perform any duties and to develop and submit to each other any
deliverables identified in the SAF. Any documentation shall be
the property of WHIRLPOOL but may be copied by VENDOR for
internal use provided such use in compliance with the
confidentiality and conflict provisions of this Agreement.
c) Except as otherwise specifically provided for in this
Agreement or in the SAF, each party shall bear its own
expenses for each Approved Service.
d) All work on Approved Services established hereunder shall be
under the direction and control of designated representatives
of the parties and identified in the SAF. Each party may
change its designated representative at any time by written
notice to the other party.
6. PERFORMANCE OF SERVICES
a) VENDOR agrees to devote its best efforts to further
WHIRLPOOL's interests and to endeavor in every proper way to
make the assigned Services deliver successful business results
to WHIRLPOOL. To that end, VENDOR will, where applicable:
i) Familiarize itself with WHIRLPOOL's applicable
business, policies and objectives at a level
appropriate in view of the nature of the services to
be provided;
ii) If applicable, credit and pay all proper bills
incurred for WHIRLPOOL's account.
iii) Hold planning meetings between WHIRLPOOL and VENDOR,
as scheduled to review progress towards existing
goals, establish new/revised
goals, review process improvements, review business
outlook, and assure that long range goals and plans
are understood by both parties;
iv) Competently and efficiently perform the Services as
are more specifically defined in the respective SAFs;
v) Take all reasonable precautions to guard against any
loss to WHIRLPOOL through failure of VENDOR's
suppliers to properly execute their commitments;
vi) Use its best efforts to do all of the above at the
most advantageous rates, terms and conditions
available; and
vii) Make services available at reasonable times during
the term of this Agreement.
b) Any such Services that VENDOR and its employees or agents
perform for WHIRLPOOL, and VENDOR's relationship to WHIRLPOOL
in all matters relating to this Agreement, will be as an
independent contractor, and VENDOR shall have no fight to, and
will not, bind, assume or obligate WHIRLPOOL for anything in
any manner nor make any commitments whatsoever nor
representations in respect to WHIRLPOOL and its products other
than representations finished to VENDOR by WHIRLPOOL.
7. COMPENSATION, REIMBURSEMENTS & EXPENSES
a) VENDOR agrees to submit a statement in accordance with
WHIRLPOOL's then current applicable accounting procedures and
the Supplemental Terms*, if any, for each month during which
it has rendered reimbursable services hereunder for fees or
expenses authorized under any Approved Service for the
previous month; including, where applicable, any invoices paid
to Vendors and other third parties on behalf of WHIRLPOOL,
travel-related costs, requested publications, postage,
delivery and other appropriate expenditures incurred by VENDOR
in providing the services. All fees and expenses shall be
invoiced to WHIRLPOOL in U. S. dollars at the then current ISA
exchange rate.
*Supplement terms to be defined.
b) Upon WHIRLPOOL's approval of the statement, WHIRLPOOL agrees
to pay VENDOR for the amount of such statement within thirty
(30) days after receipt of the such statement. Such statements
shall be sufficiently detailed to permit WHIRLPOOL to verify
amounts due, milestones and tollgates accomplished, and
outside expenses incurred as well other details specified in
the SAF.
8. QUALITY STANDARDS
a) VENDOR will provide Services which meet or exceed quality
standards established and agreed upon by both WHIRLPOOL and
VENDOR from time to time. Specific quality standards may also
be recited in a SAF.
b) It is the parties' intent that the relationship between them
be a cooperative one and if the representatives attending
these regularly scheduled meetings cannot agree on a solution
to an issue raised both parties agree to elevate the issue
within their respective organizations until a mutually
agreeable solution is reached. To the extent one party
recommends a process improvement on the part of the other
party, the receiving party will, within a reasonable time,
inform the suggesting party whether it intends to adopt the
proposed process improvement. VENDOR and WHIRLPOOL will work
with departments and functions within the other party to
constantly improve processes that contribute to financial
performance and customer satisfaction.
9. INDEMNIFICATION
a) VENDOR, and any successors and assigns shall defend, indemnify
and hold WHIRLPOOL, its successors and assigns, and its
directors, officers, employees, and agents harmless from and
against any claims, allegations, demands, actions, lawsuits,
judgments, decrees, losses, damages, liabilities, costs and
expenses, including any amounts paid in defense or settlement,
which may arise out of or be made in connection with any
actual or alleged death or injury to any person or damage to
property resulting, or claimed to have resulted, from (i) any
act or omission of VENDOR, VENDOR's customers, or their
representatives, employees, or agents relating to any
appliances purchased or otherwise acquired from WHIRLPOOL,
including without limitation, negligent or improper
installation, transportation, storage, inspection, marketing,
servicing, repair, modification, alteration, further
manufacture, or misuse of appliances resold or otherwise
transferred by VENDOR; (ii) the failure of printed materials
VENDOR, VENDOR's customers, or their representatives,
employees, or agents provide with appliances resold or
otherwise transferred by VENDOR, to give adequate instructions
or warnings to END USE consumers; (iii) any actual or alleged
violation by VENDOR, VENDOR's customers, or their
representatives, employees, or agents of any law, statute or
ordinance of any governmental administrative order, rule or
regulation; (iv) any representation by VENDOR, VENDOR's
customers, or their representatives, employees, or agents that
appliances resold or otherwise transferred by VENDOR are
warranted in any way by WHIRLPOOL, including but not limited
to, failing to attach an effective exclusion of express and
implied warranties by WHIRLPOOL; (v) any violation of the
terms of this Agreement or the terms of any SAF appended to
this Agreement.
b) These indemnity provisions will survive termination,
cancellation or expiration of this Agreement.
10. INSURANCE
a) VENDOR shall at its expense purchase and maintain the
following insurance coverages:
i) Workers' Compensation insurance with statutory limits
for all applicable state and federal regulations and
Employers Liability insurance with policy limits of
not less than $1,000,000 is required for all VENDOR
employees performing duties hereunder.
ii) Commercial General Liability insurance as will
protect VENDOR and WHIRLPOOL from all claims for
damages due to bodily injury (including disease and
death), personal injury, or property damage arising
in connection with the Services provided by VENDOR,
its employees, agents, representatives,
subcontractors and/or business invitees. Such
insurance coverage shall: a) be occurrence-based; b)
provide limits of liability coverage in an amount not
less than $2,000,000 per occurrence; c) include at
least those coverage's generally designated
Premises/Operations, Products/Completed Operations,
and Contractual Liability; d) be written with an
insurer having a current A.M. Best rating of A-
(VIII) or better; and e) such coverage shall be
continuously maintained during the term of this
Agreement and for at least five years following the
termination of this Agreement.
iii) Automotive Liability insurance as will protect VENDOR
from any and all claims for damages due to bodily
injury (including death) or property damages arising
from or in any way connected with the ownership,
possession, operation, use, maintenance or repair of
owned, non-owned or hired motor vehicles utilized to
perform duties hereunder. Such insurance shall: a)
provide limits of liability in an amount not less
than $2,000,000 per accident; b) include pollution
liability coverage for sudden and accidental losses,
including losses arising out of collision or
overturn; and c) be written with a carrier having an
A.M. Best rating of A- (VIII) or better.
iv. Environmental Impairment Liability insurance as will
protect VENDOR and WHIRLPOOL from damage, loss, cost
or expense arising from sudden and accidental, and
gradual pollution events arising from VENDOR's or
subcontractors premises; transportation from
WHIRLPOOL; and transportation to any shredder,
recycler, or landfill. Such insurance shall; a)
provide coverage in amount not less than $5,000,000
per occurrence and S 10,000,000 in the aggregate; b)
designate
WHIRLPOOL as a loss payee, and c) be written with an
insurer having an A.M. Best rating of A- (VIII) or
better.
b) The aforementioned insurance coverages maintained by VENDOR
shall be primary insurance as respects to WHIRLPOOL, its
officers, and employees. Any insurance or self-insurance
maintained by WHIRLPOOL shall be in excess and
non-contributory to VENDOR's insurance.
c) Certificates of insurance evidencing all coverages specified
in this paragraph shall be delivered to WHIRLPOOL with the
fully executed copy of this Agreement, and within 30 days of
the expiration or termination of such certificates during the
term of this Agreement. These certificates shall contain a
provision that coverage will not be materially modified, or
canceled without at least thirty (30) days prior notice has
been delivered by the insurer to WHIRLPOOL.
11. DURATION, TERMINATION AND SCOPE OF AGREEMENT
a) Term - This Agreement shall be effective as between WHIRLPOOL
and VENDOR on the Effective Date. Until written notice of
termination is received as provided in subparagraph (b) below,
this Agreement shall continue in force.
b) Termination - Neither this Agreement nor any Approved Service
established hereunder pursuant to an SAF may be terminated by
WHIRLPOOL during that period beginning on the Effective Date
(July 8, 1998) and extending through the first anniversary
(July 8, 1999) thereof, except as provided in Section 11(c)
hereof Otherwise, either party may terminate this Agreement or
any Approved Service established hereunder at any time by
giving written notice to such effect to the other Party at
least one hundred eighty (180) days prior to the date of
termination. Termination of this Agreement automatically
terminates all Approved Services established hereunder, unless
such additional consequential terminations are explicitly
excluded from such termination by the language of such notice.
The parties further agree that any or all of the Approved
Services may be individually terminated by either party
without terminating this Agreement, provided that the written
notice requirements contained in this section are satisfied.
c) Immediate Termination - WHIRLPOOL may terminate this Agreement
or any SAF established hereunder immediately upon written
notice to VENDOR if any of the following events occur:
i) VENDOR breaches any material obligation under the
terms of this Agreement including all appended SAFs,
including but not limited to failing to maintain
accurate records, misrepresenting that a
manufacturer's warranty is applicable to appliances,
or of failing to dispose of appliances under the
terms of this Agreement including all appended SAFs.
ii) An audit of VENDOR's operations discloses
misappropriation of WHIRLPOOL funds.
iii) VENDOR ceases to function as a going concern or
ceases to conduct its operations of providing
Services.
iv) VENDOR uses WHIRLPOOL's trademarks, trade names or
service marks without the express written consent of
WHIRLPOOL.
d) Where applicable, additional termination provisions may be
included in a SAF.
12. INTERPRETATION
a) Captions - Captions, if any, of the various sections herein
are for convenience only, and they are not intended to be any
part of the body or text of this Agreement nor are they
intended to be referred to in construing any of the provisions
hereof.
b) Partial Invalidity - In the event any covenant, condition or
other provision of this Agreement is held invalid, void or
illegal by any court of competent jurisdiction, the same shall
be deemed severable from the remainder of this Agreement and
shall in no way affect, impair or invalidate any other
covenant, condition or provision, and shall be deemed replaced
by a provision which comes closest to such unenforceable
provision in language and intent, without being invalid, void
or illegal.
c) Conflict with Service Authorization Form - Except as otherwise
provided herein, in the event of a conflict between the terms
of a this Agreement with the terms of a Service Authorization
Form, the terms and conditions of this Agreement, this shall
prevail.
d) Conflict with Other Documents - Except as otherwise provided
herein, in the event of any conflict between the terms of this
Agreement and any sales literature, order, acceptance,
invoice, shipping document, correspondence, agreement or other
document, the terms of this Agreement shall prevail.
e) Choice of Law - This Agreement shall be interpreted under the
laws of the State of Michigan.
f) Arbitration - All disputes or claims in connection with or
relating to this Agreement, or the breach or termination of
this Agreement, that cannot be resolved by good faith
negotiations between appropriate members of the senior
management teams of both parties, shall be finally resolved by
binding arbitration held in Chicago, Illinois. `No punitive
damages shall be awarded. The dispute will be arbitrated by a
mutually acceptable arbitrator selected by Resolute Systems,
Inc. Each party will share in the costs of the arbitration
equally. By mutual agreement, the parties may agree to replace
arbitration with some other form of Alternate Dispute
Resolution (ADR), such as neutral fact-finding or a
mini-trial. Nothing in this section shall prevent either party
from resorting to judicial proceedings if (a) good faith
efforts to resolve the dispute under these . Procedures have
been unsuccessful; or (b) interim relief from a court is
necessary to prevent serious and irreparable injury to one
party of the other.
13. GENERAL
a) Use of Trade Names and Trademarks - VENDOR may not use any
trademark, trade name or service ▇▇▇▇ of WHIRLPOOL, including
but not limited to the WHIRLPOOL, KITCHENAID, ▇▇▇▇▇ and ESTATE
trademarks, in any manner for any purpose without prior
written consent from WHIRLPOOL. Nothing herein or in any
written permission shall grant VENDOR any right to or interest
in any WHIRLPOOL trademark, trade name or service ▇▇▇▇. VENDOR
hereby acknowledges WHIRLPOOL's ownership of all rights, title
and interest in its trademarks, trade names and service marks.
b) Conduct - It is agreed that the employees and consultants of
each party will at all times comply with the other party's
rules and regulations for visitors and will display
respectful, acceptable behavior in all Parties' places of
business.
c) Notices - All notices provided for in this Agreement shall be
given in writing and shall be effective when either (1) served
by personal delivery or (2) deposited, postage prepaid in the
United States registered or certified mails addressed to the
respective Contract Administrators.
d) Assignment - WHIRLPOOL shall have the absolute right to assign
in whole or in part its rights and obligations under this
Agreement to any legal entity controlled by or controlling
WHIRLPOOL, or under the common control of WHIRLPOOL, without
the prior written consent of VENDOR. Otherwise, this Agreement
shall not be assigned by either Party, by operation of law or
otherwise, without the prior written consent of the other
Party, which consent may be arbitrarily withheld for any or no
reason. Any purported or attempted assignment contrary to the
terms hereof shall be null and void and of no force or
effect..
e) Conflicts of Interest - During the life of this Agreement
VENDOR will not enter into any agreement with another party
which will conflict with the obligations under the terms and
conditions of this Agreement. Prior disclosure is required
under this provision if the activity or interest is related,
directly or indirectly, to any activity that VENDOR may be
involved with on behalf of WHIRLPOOL in the course of VENDOR's
performance of its obligations under this Agreement.
f) Audits - VENDOR shall maintain thorough and complete records
of all business conducted with WHIRLPOOL. WHIRLPOOL shall have
the right during normal business hours to audit the books,
records, accounts, ledgers and all other documents relating to
the business that VENDOR conducts with WHIRLPOOL. The
individuals conducting, the audit will use reasonable efforts
to minimize the disturbance they will cause to the normal
activities and the ordinary course of business of VENDOR.
g) Force Majeure - No party shall be responsible for delays or
failures to perform resulting from events beyond its control
but shall have a responsibility to mitigate any damage which
might arise as a result of any such event. Such events shall
include, but not be limited to, acts of God, strikes,
blackouts, riots, acts of war, epidemics, government
regulations superimposed after the fact, fire, communication
line failures, power failures, earthquakes, or other
disasters.
14. MERGER, WAIVER, AND MODIFICATION
a) Entire Agreement - This Agreement, including any Exhibits, if
any, hereto, together with all SAFs, including all Schedules
appended to any SAFs, mutually agreed to hereunder, constitute
the entire agreement between the parties with regard to the
subject hereof and supersedes and cancels all previous
agreements, negotiations, commitments and writings, and may
not be released, discharged, abandoned, changed or modified in
any manner, orally or otherwise, except by an instrument in
writing signed by a duly authorized officer of each of the
parties hereto.
b) Waiver - No omission or delay by any party at any time to
enforce any light or remedy reserved to it, or to require
performance of any of the terms, covenants, or provisions of
this Agreement by another party at any time designated, shall
be a waiver of any such right or remedy to which such party is
entitled, nor shall it in any way affect the right of such
party to enforce such provisions thereafter.
c) Modification - This Agreement may only be modified by written
instrument, properly executed by duly authorized officers of
VENDOR and WHIRLPOOL. No such modification shall affect any
Approved Service which is executed prior to the effective date
of such modification unless the parties have agreed in writing
to the applicability of such modification to such pre-existing
Approved Service.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO
BE DULY EXECUTED IN THEIR RESPECTIVE CORPORATE NAMES BY THEIR DULY AUTHORIZED
OFFICER, AS OF THE DAY AND DATE FIRST MENTIONED ABOVE.
WHIRLPOOL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Manager, NAR Logistics
Date:
-------------------------------------------
APPLIANCE RECYCLING CENTERS OF
AMERICA. INC. (ARCA).
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Date:
----------------------------------
[VENDOR]
SAF - XX
DISTRESSED APPLIANCES
SERVICE AUTHORIZATION FORM
AS PROVIDED IN ARTICLE 4 OF THE AGREEMENT DATED JULY 8, 1998 BETWEEN WHIRLPOOL
CORPORATION ("WHIRLPOOL') AND APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
("VENDOR"), AND ENTITLED "REVERSE LOGISTICS MASTER SERVICE AGREEMENT." WHIRLPOOL
PROPOSES TO APPOINT VENDOR TO PURCHASE AND RESELL OR DISPOSE OF DISTRESSED
APPLIANCES IN THE TERRITORY. IF ACCEPTED BY VENDOR ALL OF THE DEFINITIONS AND
TERMS AND CONDITIONS OF THE AGREEMENT SHALL APPLY TO THIS SAF.
1. If signed below by both parties, then during the term of this SAF
provided below VENDOR agrees to purchase and resell or dispose of
distressed appliances from WHIRLPOOL (the "Approved Services") for the
term of, and in accordance with the provisions of this SAF and the
Agreement.
2. Definitions.
a) "Ding and Dent Appliances" shall mean appliances manufactured
by WHIRLPOOL, or OEM suppliers, that have been damaged
cosmetically, but are functional for the use intended and,
which would have been for sale by WHIRLPOOL in the Territory
if not previously damaged.
b) "Distressed Appliances" shall mean Ding and Dent Appliances,
obsolete appliances, factory blemished appliances, and any
other appliances specified by WHIRLPOOL as distressed.
Distressed Appliances that VENDOR determines are fit for the
use intended shall be referred to as "Salable Appliances."
c) "Scrap Appliances" shall mean Distressed Appliances that are
damaged to the extent that they are not fit for the use
intended.
3. The Territory. VENDOR agrees to provide the Approved Services in the
territory specified in Schedule B attached to this SAF (the
"Territory").
4. Description of Services. VENDOR agrees:
a) To purchase such Distressed Appliances from WHIRLPOOL as
WHIRLPOOL shall offer to VENDOR. VENDOR shall purchase
Distressed Appliances from WHIRLPOOL subject to the following
limitations:
i) VENDOR understands that WHIRLPOOL may offer its
retail dealers to whom Ding and Dent Appliances were
originally shipped the opportunity
to purchase such appliances at a markdown price
(referred to as "Dealer Retained Ding and Dents").
Except for Dealer Retained Ding and Dents, WHIRLPOOL
agrees to offer all Ding and Dent Appliances in the
Territory to VENDOR.
ii) VENDOR shall be obligated to purchase Ding and Dent
Appliances. up to $3,000,000 in any given three (3)
month period, except as otherwise provided herein.
iii) VENDOR shall not be obligated to purchase nor take
delivery of Distressed Appliances unless WHIRLPOOL
proposes to sell at least a group of forty (40)
Distressed Appliances located at any Regional
Distribution Center, Local Distribution Center or
Factory Distribution Center (collectively,
"Distribution Center").
iv) WHIRLPOOL agrees to offer to VENDOR the option to
purchase Distressed Appliances (other than Ding and
Dent Appliances) in amounts and on terms no less
favorable than any other purchaser of such other
Distressed Appliances.
b) To inspect all Distressed Appliances received from WHIRLPOOL
as set forth in Schedule C appended to this SAF. Inspection
shall take place at VENDOR's facility. Distressed Appliances
that pass VENDOR's inspection shall be referred to as "Salable
Appliances." VENDOR shall accept or object to the appliances
being classified as Ding and Dent Appliances by written notice
delivered within five (5) days of receipt. VENDOR may object
to the classification as Ding and Dent Appliances only if
VENDOR in good faith believes such appliances should be
classified as, and disposed of as Scrap Appliances. VENDOR
shall hold any appliances it believes should be classified as
Scrap Appliances for a period of thirty (30) days for
inspection by WHIRLPOOL. VENDOR and WHIRLPOOL shall cooperate
in good faith to determine and agree upon which appliances
will be reclassified as Scrap Appliances. If WHIRLPOOL fails
to respond to VENDOR's notice within the thirty (30) day
period, such appliances shall be reclassified and disposed of
as Scrap Appliances.
c) To dispose of Distressed Appliances reclassified as Scrap
Appliances as provided in VENDOR SAF. [the SAF relating to
Scrap and PEX appliances]
d) To affix a clear label of the exterior of all Salable
Appliances stating that the Salable Appliance is not warranted
by the manufacturer including the following disclaimer:
WHIRLPOOL EXPRESSLY DISCLAIMS ANY WARRANTIES,
STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR PURPOSE
and to affix a clear label of the exterior of all Salable
Appliances setting forth VENDOR's warranty.
e) To report model and serial number information for all Salable
Appliances and Recycled Appliances to WHIRLPOOL, and to
reimburse WHIRLPOOL for any warranty costs mistakenly billed
to and paid by WHIRLPOOL for appliances resold by VENDOR.
Attached Schedule C sets forth minimum standards for inspecting
Distressed Appliances and recycling Scrap Appliances.
5. Purchase Terms and Conditions. VENDOR agrees:
a) That WHIRLPOOL shall invoice VENDOR for Distressed Appliances
upon shipment from WHIRLPOOL's Distribution Center or other
specified facility.
b) To purchase Salable Appliances at the prices set forth in
Schedule C. VENDOR and WHIRLPOOL agree to review the product
mix of Ding and Dent Appliances monthly.
i) If the product mix changes so that it is unreasonably
disproportionate compared to the anticipated seasonal
mix, VENDOR and WHIRLPOOL shall negotiate in good
faith to adjust prices for Salable Appliances that
makes the resale of Salable Appliances economically
feasible for VENDOR.
ii) VENDOR acknowledges and agrees that WHIRLPOOL may
update, change or modify in any respect the prices
set forth in Schedule C. WHIRLPOOL agrees to provide
VENDOR at least thirty (30) days written notice of
any modifications to Schedule C. In the event
WHIRLPOOL's price increase is unacceptable to VENDOR,
VENDOR may terminate this SAF, or the Agreement as
provided in Paragraph C of the Agreement.
iii) If any Ding and Dent Appliance is reclassified as
Scrap Appliance by agreement or by expiration of
WHIRLPOOL's thirty (30) day inspection period, the
price for such Scrap Appliances shall be adjusted to
twenty (20) percent of the Ding and Dent Appliance
price(s) set forth in Schedule C or Fifty Dollars
($50.00). The difference between the Ding and Dent
Appliance price and the adjusted Scrap Appliance
price shall be paid to VENDOR as a credit against
future purchases of Ding and Dent Appliances.
c) That Recycled Appliances will be recycled by VENDOR at no
charge to WHIRLPOOL. In no event shall WHIRLPOOL be required
to take possession of any Ding and Dent Appliances
reclassified as Scrap Appliances.
d) To make payment in full for Distressed Appliances no later
than thirty (30) days from the date of invoice.
e) To transport, or be responsible for coordinating transport,
and pay all costs and expenses of shipment, for all Distressed
Appliances purchased from WHIRLPOOL in the Territory.
f) That title and risk of loss for all Distressed Appliances
purchased by VENDOR shall transfer to VENDOR when such
appliances leave WHIRLPOOL's Distribution Center.
g) Not to permit, nor cause to attach, any liens or encumbrances
against any WHIRLPOOL property in its possession.
6. Limitation of Liability and Disclaimer or Warranties.
VENDOR ACKNOWLEDGES THAT ALL APPLIANCES SOLD TO,- AND TRANSFERRED TO,
VENDOR ARE RECEIVED BY VENDOR ON AN "AS IS", "WITH ALL FAULTS" BASIS,
WITHOUT ANY WARRANTIES TO VENDOR. WHIRLPOOL EXPRESSLY DISCLAIMS ANY
WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE.
VENDOR IS NOT AUTHORIZED TO REPRESENT OR ASSUME FOR WHIRLPOOL ANY
LIABILITY IN CONNECTION WITH THE SALE OF APPLIANCES. THERE ARE NO
WARRANTIES TO VENDOR.
7. Authorized Customers/Locations. VENDOR is ONLY authorized to sell
Salable Appliances to END USE customers in the Continental United
States, through written approval from WHIRLPOOL.
In addition, VENDOR may resell Salable Appliances to:
a) Authorized WHIRLPOOL dealers.
b) Non-authorized used appliance dealers as may be proposed to
WHIRLPOOL as an authorized dealer by VENDOR, and for whom
WHIRLPOOL has given prior written consent which WHIRLPOOL may
withhold in its sole and absolute discretion.
(Collectively referred to as "Dealers"). WHIRLPOOL shall have the right
in its sole and absolute discretion to designate Authorized WHIRLPOOL
Dealers.
8. Resale Terms and Conditions. VENDOR agrees:
a) That VENDOR will not, and will not permit any of VENDOR's
customers that resell Salable Appliances, to include any
WHIRLPOOL trademark in any advertisement for such Salable
Appliances. This prohibition does not prevent VENDOR, or any
of VENDOR's customers, from advertising that such seller has
major brand reconditioned appliances for sale so long as such
advertisements do not include any reference to any WHIRLPOOL
trademark(s).
b) That all Salable Appliances shall be clearly and conspicuously
labeled with consumer disclosure - (i) that WHIRLPOOL is NOT
PROVIDING any warranty for such Appliance; and (ii) of
VENDOR's warranty, if any.
c) To keep WHIRLPOOL's Use and Care Guides and Installation
Instructions packaged with Salable Appliances.
d) To install Salable Appliances, or have Salable Appliances
installed, as specified in WHIRLPOOL installation
instructions.
e) To instruct END USE customers in the proper use and operation
of Salable Appliances.
f) To remove warranty registration cards from all Salable
Appliances prior to resale to an END USE consumer.
g) That the prices at which VENDOR offers Salable Appliances for
sale are to be determined by VENDOR, or VENDOR's customer in
their sole discretion.
h) That WHIRLPOOL will not make any advertising or promotion
funds available to VENDOR, or to any of VENDOR's customers in
connection with the sale and resale of Salable Appliances.
9. In addition to the termination provision of the Agreement, this SAF may
be terminated by VENDOR upon ten (10) days written notice to WHIRLPOOL
if WHIRLPOOL's changes in the prices set forth in Schedule C appended
to this SAF are unacceptable to VENDOR.
10. This SAF, if accepted, shall be effective between WHIRLPOOL and VENDOR
on the Effective Date of this SAF. Until written notice of termination
is received as provided in paragraph 11 of the Agreement, this SAF
shall continue in force. During the term, of this SAF, VENDOR will not
enter into any agreement with another party which will conflict with
the obligations under the terms and conditions of this SAF.
IN WITNESS WHEREOF, the parties have caused this Service Authorization Form to
be executed as of this 8th day of July, 1998.
APPLIANCE RECYCLING
CENTERS OF AMERICA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: PRESIDENT Its: GENERAL MANAGER, LOGISTICS
[VENDOR]
SAF - XX
SCRAP AND PRODUCT EXCHANGE APPLIANCES
SERVICE AUTHORIZATION FORM
AS PROVIDED IN ARTICLE 4 OF THE AGREEMENT DATED JULY 1, 1998 BETWEEN WHIRLPOOL
CORPORATION' ("WHIRLPOOL") AND APPLIANCE RECYCLING CENTERS OF AMERICA, INC.,
("VENDOR"), AND ENTITLED "REVERSE LOGISTICS MASTER SERVICE AGREEMENT," WHIRLPOOL
PROPOSES TO APPOINT VENDOR TO PURCHASE AND RESELL OR DISPOSE OF SCRAP AND
PRODUCT EXCHANGE APPLIANCES IN THE TERRITORY. IF ACCEPTED BY VENDOR ALL OF THE
DEFINITIONS AND TERMS AND CONDITIONS OF THE AGREEMENT SHALL APPLY TO THIS SAF.
I If signed below by both parties, during the term of this SAF provided
below VENDOR agrees to purchase and resell or dispose of all scrap and
product exchange appliances offered to VENDOR by WHIRLPOOL in the
Territory (the "Approved Services") for the term of, and in accordance
with the provisions of this SAF and the Agreement.
2. The Territory. VENDOR agrees to provide the Approved Services in the
territory specified in Schedule B attached to this SAF (the
"Territory").
3. Definitions.
a) "Product Exchange Appliances" or "PEX Appliances" shall mean
WHIRLPOOL appliances that have been returned to WHIRLPOOL from
dealers or directly from END USERS for any reason, in exchange
for new appliances.
b) "Scrap Appliances" shall mean Distressed Appliances that are
damaged to the extent that they are not fit for the use
intended.
4. Description of Services. VENDOR agrees:
a) To purchase all Scrap Appliances and PEX Appliances WHIRLPOOL
has not designated for destruction that pass VENDOR's
inspection, and/or are reconditioned and pass VENDOR's
inspection, (collectively referred to as "Salable Appliances")
from WHIRLPOOL at WHIRLPOOL Regional Distribution Centers,
Local Distribution Centers and Factory Distribution Centers
(collectively referred to as "Distribution Centers") in the
Territory. The Distribution Centers are listed in Schedule A
attached to this SAF.
b) To recondition and resell Scrap Appliances and PEX Appliances
as provided in this SAF.
c) To recycle Scrap Appliances and PEX appliances designated by
WHIRLPOOL as "total destruction only", or as "destruction
except for non-operational parts", or that do not pass
VENDOR's inspection and can not be reconditioned to pass
VENDOR's inspection (collectively referred to as "Recycled
Appliances") as provided in Schedule C attached to this SAF.
In no event shall VENDOR sell or otherwise dispose of Recycled
Appliances or their component parts designated as "total
destruction only" (referred to as "Recycled Components") in
any manner in which such Recycled Appliances or Recycled
Component Parts could be sold or otherwise transferred to
consumers.
d) To use "non-operational parts" (including trim, shelves,
doors, liners, and frame/enclosure parts, but excluding all
electrical and mechanical parts) from Recycled Appliances
designated by WHIRLPOOL as "destruction except for
non-operational parts" (referred to as "Reusable Components")
for VENDOR's reconditioning operations.
e) To affix a clear label on the exterior of all Scrap Appliances
and PEX Appliances stating that the such appliances are not
warranted by the manufacturer including the following
disclaimer:
WHIRLPOOL EXPRESSLY DISCLAIMS ANY WARRANTIES,
STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR PURPOSE
and to affix a clear label on the exterior of all Scrap
Appliances and PEX Appliances setting forth VENDOR's warranty
on all appliances to be resold.
f) To report model and serial number information for all Scrap
Appliances and PEX Appliances and Recycled Appliances to
WHIRLPOOL, and to reimburse WHIRLPOOL for any warranty costs
mistakenly billed to and paid by WHIRLPOOL for any appliances
resold by VENDOR.
Attached Schedule C sets forth minimum standards for inspection,
reconditioning and recycling appliances.
5. Purchase Terms and Conditions. VENDOR agrees:
a) To purchase Scrap Appliances and PEX Appliances at the prices
set forth in Schedule C. Prices will be evaluated every ninety
(90) days and adjusted as agreed upon by WHIRLPOOL and VENDOR.
Recycled Appliances will be recycled by VENDOR at no charge to
WHIRLPOOL.
b) To pay for Scrap Appliances and PEX Appliances no later than
thirty (30) days from the date of invoice.
c) To transport, or be responsible for coordinating transport,
and pay all costs and expenses of shipment, for all Scrap
Appliances and PEX Appliances purchased from WHIRLPOOL.
d) That title and risk of loss for all Scrap Appliances and PEX
Appliances purchased by VENDOR shall transfer to VENDOR when
such appliances leave WHIRLPOOL's Distribution Center.
e) Not to permit, nor cause to attach, any liens or encumbrances
against any WHIRLPOOL property in its possession.
6. Limitation of Liability and Disclaimer or Warranties.
VENDOR ACKNOWLEDGES THAT ALL APPLIANCES SOLD TO, AND TRANSFERRED TO,
VENDOR ARE RECEIVED BY VENDOR ON AN "AS IS", "WITH ALL FAULTS" BASIS,
WITHOUT ANY WARRANTIES TO VENDOR. WHIRLPOOL EXPRESSLY DISCLAIMS ANY
WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE.
VENDOR IS NOT AUTHORIZED TO REPRESENT OR ASSUME FOR WHIRLPOOL ANY
LIABILITY IN CONNECTION WITH THE SALE OF APPLIANCES.
7. Authorized Customers/Locations. VENDOR is ONLY authorized to sell
Salable Appliances to END USE customers in the Continental United
States, THROUGH WRITTEN authorization from WHIRLPOOL.
In addition, VENDOR may resell Salable Appliances to:
a) Authorized WHIRLPOOL dealers.
b) Previously non-authorized used appliance dealers as may be
proposed to WHIRLPOOL as an authorized dealer by VENDOR, and
for whom WHIRLPOOL has given prior written consent which
WHIRLPOOL may withhold in its sole and absolute discretion.
(Collectively referred to as "Dealers"). WHIRLPOOL shall have the right
in its sole and absolute discretion to designate Authorized WHIRLPOOL
Dealers.
8. Resale Terms and Conditions. VENDOR agrees:
a) That VENDOR will not, and will not permit any of VENDOR's
customers that resell Scrap Appliances and PEX Appliances, to
include any WHIRLPOOL trademark in any advertisement for such
Scrap Appliances. This prohibition does not prevent VENDOR, or
any of VENDOR's customers, from advertising that
such seller has major brand reconditioned appliances for sale
so long as such advertisements do not include any reference to
any WHIRLPOOL trademark(s).
b) That all Scrap Appliances shall be clearly and conspicuously
labeled with consumer disclosure - (i) that WHIRLPOOL is NOT
PROVIDING any warranty for such Appliance; and (ii) of
VENDOR's warranty, if any.
c) To keep WHIRLPOOL's Use and Care Guides and Installation
Instructions packaged with Scrap Appliances.
d) To install Scrap Appliances, or have Scrap Appliances
WHIRLPOOL installation instructions.
e) To instruct END USE customers in the proper use and' operation
of Scrap Appliances.
f) To remove warranty registration cards from all Scrap
Appliances prior to resale to an END USE consumer.
g) That the prices at which VENDOR offers Scrap Appliances for
sale are to be determined by VENDOR, or VENDOR's customer in
their sole discretion.
h) That WHIRLPOOL will not make any advertising or promotion
funds available to VENDOR, or to any of VENDOR's customers in
connection with the sale and resale of Scrap Appliances.
i) In addition to the termination provision of the Agreement,
this SAF may be terminated by VENDOR upon ten (10) days
written notice to WHIRLPOOL if WHIRLPOOL's changes in the
prices set forth in Schedule C appended to this SAF are
unacceptable to VENDOR.
9. This SAF, if accepted, shall be effective between WHIRLPOOL and VENDOR
on the Effective Date of this SAF. Until written notice of termination
is received as provided in paragraph II of the Agreement, this SAF
shall continue in force. During the term of this SAF, VENDOR will not
enter into any agreement with another party which will conflict with
the obligations under the terms and conditions of this SAF.
IN WITNESS WHEREOF, the parties have caused this Service Authorization Form to
be executed as of this 8th day of July 1998 (the "Effective Date").
APPLIANCE RECYCLING
CENTERS OF AMERICA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: PRESIDENT Its: GENERAL MANAGER, LOGISTICS
[VENDOR]
SAF - XX
SCHEDULE A
DISTRIBUTION CENTERS
Distribution Centers in the Territory include the following:
ARCA has the option to purchase distressed appliances from the following
Distribution Centers as Whirlpool will make available from time to time.
▇▇▇▇▇ Distribution Center
Evansville Distribution Center
Findlay Distribution Center
Ft. ▇▇▇▇▇ Distribution Center
▇▇▇▇▇▇▇▇ Distribution Center
▇▇▇▇▇▇ Distribution Center
Oxford/Tulsa Distribution Center
[VENDOR]
SAF - XX
SCHEDULE B
TERRITORY
Territory is defined as follows:
Quality Express - Columbus, Ohio Region
Quality Express - Ontario, California Region
Quality Express - Kent, Washington Region
Quality Express - St. Louis, Missouri Region
[VENDOR]
SAF - XX
SCHEDULE C
DISTRESSED APPLIANCE PRICE LIST
Current ▇▇ ▇▇▇▇▇ Sheets
Dated: 3/18/98 L/▇▇ ▇▇▇▇
3/18/98 OTH - Dent
10/3/97 SCP-ARCA
[VENDOR]
SAF - XX
SCHEDULE D
MINIMUM STANDARDS FOR
INSPECTION, RECONDITIONING AND RECYCLING
OF DISTRESSED APPLIANCES
INSPECTION AND RECONDITIONING MINIMUM STANDARDS AND PROCEDURES
All Distressed Appliances and Scrap Appliances or PEX Appliances not designated
for destruction by WHIRLPOOL shall be inspected by VENDOR to determine if such
appliances are or can made fit for the intended purpose. Such inspection shall
include at least confirmation that each such appliance meets all applicable
standards, including but not limited to UL, AGA and CSA standards.
All appliances which are fit for the intended purpose and meet, or are repaired
and then meet, all applicable standards, and pass any VENDOR's inspection shall
be designated as "Salable Appliances" and may be resold by VENDOR under the
terms of the Agreement and the SAF to which this Schedule is appended.
All appliances which are not fit for the intended purpose or DO NOT meet, or can
not be repaired to meet, all applicable standards, and pass VENDOR's inspection
shall be designated as Scrap Appliances and disposed of by VENDOR as provided
under the terms of the Agreement and the Scrap and Product Exchange Appliances
SAF.
RECYCLING MINIMUM STANDARDS AND PROCEDURES
All appliances designated by WHIRLPOOL as Scrap Appliances, and all appliances
determined by VENDOR to be Scrap Appliances (collectively referred to as
"Recycled Appliances") and any parts and components from Recycled Appliances
designated as "total destruction only" shall be recycled by VENDOR according to
the terms of the Agreement, the SAF to which this Schedule is appended and in
accordance with the following minimum standards and procedures:
All Recycled Appliances and Recycled Components must be scrapped in a way that
will render such appliance or component useless and make repair impossible.
All regulated fluids and materials that require removal from Recycled Appliances
and Recycled Components must be removed, handled, stored, recycled and disposed
of according to Federal, state and local regulations.
Recycled Appliance carcasses must be recycled whenever possible. Shredding by an
automobile shredder after all regulated materials have been removed is a proper
and cost-effective method of recycling.
VENDOR must maintain records for at least three (3) years that indicate the
model and serial number by product category of all Recycled Appliances recycled
for WHIRLPOOL including the date of recycling.
All Recycled "Destruction Only" Appliances must be recycled within thirty (30)
days of receipt by VENDOR.