EXHIBIT 10.3
FORM OF
AMENDED AND RESTATED SERVICES AGREEMENT
dated as of __________, 1998
between
ABERCROMBIE & FITCH CO.
and
THE LIMITED, INC.
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
Section 1.1. Definitions.............................................. 2
Section 1.2. Internal References...................................... 4
ARTICLE 2
Purchase and Sale of Services
Section 2.1. Purchase and Sale of Services............................ 4
Section 2.2. Additional Services...................................... 5
ARTICLE 3
Service Costs; Other Charges
Section 3.1. Service Costs Generally.................................. 5
Section 3.2. Customary Billing........................................ 5
Section 3.3. Pass-Through Billing..................................... 6
Section 3.4. Certain Benefits Matters................................. 6
Section 3.5. Invoicing and Settlement of Costs........................ 6
ARTICLE 4
The Services
Section 4.1. General Standard of Service.............................. 7
Section 4.2. Delegation............................................... 8
Section 4.3. Limitation of Liability.................................. 8
Section 4.4. Indemnification of The Limited by Abercrombie & Fitch.... 9
Section 4.5. Indemnification of Abercrombie & Fitch by The Limited.... 10
Section 4.6. Further Indemnification.................................. 10
Section 4.7. Notice of Certain Matters................................ 10
ARTICLE 5
Term and Termination
Section 5.1. Term..................................................... 11
Section 5.2. Termination.............................................. 11
Section 5.3. Effect of Termination.................................... 12
ARTICLE 6
Additional Agreements
Section 6.1. Confidential Information................................. 13
Section 6.2. Associate Matters........................................ 14
Section 6.3. Financial Support Arrangements........................... 14
Section 6.4. Insurance Matters........................................ 15
ARTICLE 7
Miscellaneous
Section 7.1. Prior Agreements......................................... 16
Section 7.2. Future Litigation and Other Proceedings.................. 16
Section 7.3. No Agency................................................ 17
Section 7.4. Subcontractors........................................... 17
Section 7.5. Force Majeure............................................ 17
Section 7.6. Entire Agreement......................................... 18
Section 7.7. Information.............................................. 18
Section 7.8. Notices.................................................. 18
Section 7.9. Governing Law............................................ 19
Section 7.10. Dispute Resolution....................................... 19
Section 7.11. WAIVER OF JURY TRIAL..................................... 20
Section 7.12. Severability............................................. 20
Section 7.13. Amendment................................................ 20
Section 7.14. Counterparts............................................. 20
Section 7.15. Services to The Limited.................................. 20
Section 7.16. Termination of Old Services Agreement.................... 20
AMENDED AND RESTATED SERVICES AGREEMENT
This Amended and Restated Services Agreement (this "Agreement")
is entered into as of _________ __, 1998 by and between Abercrombie & Fitch
Co., a Delaware corporation ("Abercrombie & Fitch"), and The Limited, Inc. a
Delaware corporation ("The Limited").
RECITALS
WHEREAS, The Limited owned approximately 84% of the outstanding
common stock of Abercrombie & Fitch prior to the consummation of the Exchange
Offer (as defined below);
WHEREAS, The Limited will no longer own any of the outstanding
common stock of Abercrombie & Fitch after the consummation of the Exchange
Offer and Spin-Off (as defined below), if any;
WHEREAS, The Limited has heretofore directly or indirectly
provided certain administrative, financial, management and other services to
the Abercrombie & Fitch Entities (as defined below) and Abercrombie & Fitch
has heretofore retained The Limited as an independent contractor to provide,
directly or indirectly, certain of those services to the Abercrombie & Fitch
Entities pursuant to the Services Agreement between Abercrombie & Fitch and
The Limited dated as of September 27, 1996 (the "Old Services Agreement"); and
WHEREAS, Abercrombie & Fitch and The Limited desire to amend
and restate the Old Services Agreement as set forth herein.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, The Limited and
Abercrombie & Fitch, for themselves, their successors and assigns, hereby
agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) As used in this Agreement, the
following terms will have the following meanings, applicable both to the
singular and the plural forms of the terms described:
"Abercrombie & Fitch Entities" means Abercrombie & Fitch and
its Subsidiaries, and "Abercrombie & Fitch Entity" shall mean any of the
Abercrombie & Fitch Entities.
"Agreement" has the meaning ascribed thereto in the preamble
hereto, as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York or Columbus, Ohio
are authorized or required by law to close.
"Change of Control" means (i) the direct or indirect
acquisition (by merger, consolidation, business combination or otherwise) by
any Person or group or Persons of beneficial ownership (as defined in Rule
13d-1 and Rule 13d-5 under the Securities Exchange Act of 1934) of 50% or more
of the Total Voting Power of Abercrombie & Fitch, (ii) any merger,
consolidation or other business combination of Abercrombie & Fitch or a
Subsidiary of Abercrombie & Fitch with any Person after giving effect to which
(x) the shareholders of Abercrombie & Fitch immediately prior to such
transaction do not own at least 50% of the Total Voting Power of the ultimate
parent entity of the parties to such transaction or (y) individuals who were
directors of Abercrombie & Fitch immediately prior to such transaction (or
their designees) do not constitute a majority of the board of directors of
such ultimate parent entity and (iii) the direct or indirect acquisition by
any Person or group of Persons of all or substantially all of the assets of
Abercrombie & Fitch.
"Class A Common Stock" means the Class A common stock, par
value $.01 per share, of Abercrombie & Fitch.
"Effective Date" means the Expiration Date of the Exchange
Offer.
"Exchange Offer" means the offer by The Limited to exchange all
of its shares of Class A Common Stock for shares of common stock, par value
$.50 per share, of The Limited, which offer commenced on _____________, 1998
and was consummated as of the date hereof.
"Limited Entities" means The Limited and its Subsidiaries, and
"Limited Entity" shall mean any of The Limited Entities.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (including any department or agency thereof) or other entity.
"Schedules" means Schedules I, II, III, IV, V, VI and VII
hereto.
"Services" means the various services described in the
Schedules.
"Subsidiary" means, as to any Person, any corporation,
association, partnership, joint venture or other business entity of which more
than 50% of the voting capital stock or other voting ownership interests is
owned or controlled directly or indirectly by such Person or by one or more of
the Subsidiaries of such Person or by a combination thereof.
"Total Voting Power" with respect to any Person means the total
combined voting power of all securities of such Person entitled to vote
generally in the election of directors of such Person.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- -------
Abercrombie & Fitch Preamble
Abercrombie & Fitch Indemnified Person 4.5
Actions 4.4
Applicable Insurance 6.4
Benefit Billing 3.1
Benefits Services 3.4
Confidential Information 6.1
Customary Billing 3.1
Employee Welfare Plans 4.2
Financial Support Arrangements 6.3(a)
force majeure 7.5
Limited Indemnified Person 4.3
Pass-Through Billing 3.1
Payment Date 3.5
Prior Agreements 7.1
Service Costs 3.1
The Limited Preamble
The Limited Plans 3.4
Section 1.2. Internal References. Unless the context
indicates otherwise, references to Articles, Sections and paragraphs shall
refer to the corresponding articles, sections and paragraphs in this Agreement
and references to the parties shall mean the parties to this Agreement.
ARTICLE 2
Purchase and Sale of Services
Section 2.1. Purchase and Sale of Services. (a) On the
terms and subject to the conditions of this Agreement and in consideration
of the Service Costs described below, The Limited agrees to provide to
Abercrombie & Fitch, or procure the provision to Abercrombie & Fitch of,
and Abercrombie & Fitch agrees to purchase from The Limited, the Services.
Unless otherwise specifically agreed by The Limited and Abercrombie &
Fitch, the Services to be provided or procured by The Limited hereunder
shall be substantially similar in scope, quality, and nature to those
customarily provided to, or procured on behalf of, the Abercrombie & Fitch
Entities prior to the Effective Date.
(b) It is understood that (i) Services to be provided to
Abercrombie & Fitch under this Agreement will, at Abercrombie & Fitch's
request, be provided to Subsidiaries of Abercrombie & Fitch and (ii) The
Limited may satisfy its obligation to provide or procure Services hereunder by
causing one or more of its Subsidiaries to provide or procure such Services.
With respect to Services provided to, or procured on behalf of, any Subsidiary
of Abercrombie & Fitch, Abercrombie & Fitch agrees to pay on behalf of such
Subsidiary all amounts payable by or in respect of such Services pursuant to
this Agreement; provided that, without in any way limiting the obligations of
Abercrombie & Fitch to pay for such Services, Abercrombie & Fitch may allow
Abercrombie & Fitch Service Corporation, a Delaware corporation, to make such
payments on its behalf.
Section 2.2. Additional Services. In addition to the Services
to be provided or procured by The Limited in accordance with Section 2.1, if
requested by Abercrombie & Fitch, and to the extent that The Limited and
Abercrombie & Fitch may mutually agree, The Limited shall provide additional
services (including services not provided by The Limited to the Abercrombie &
Fitch Entities prior to the Effective Date) to Abercrombie & Fitch. The scope
of any such services, as well as the term, costs, and other terms and
conditions applicable to such services, shall be as mutually agreed by The
Limited and Abercrombie & Fitch.
ARTICLE 3
Service Costs; Other Charges
Section 3.1. Service Costs Generally. The Schedules hereto
indicate, with respect to the Services listed therein, whether the costs to be
charged to Abercrombie & Fitch for such Service are to be determined by (i)
the customary billing method described in Section 3.2 ("Customary Billing"),
(ii) the pass-through billing method described in Section 3.3 ("Pass-Through
Billing") or (iii) based upon a calculation of certain costs relating to
employee benefit plans and benefit arrangements described in Section 3.4
("Benefit Billing"). The Customary Billing, Pass-Through Billing and Benefit
Billing methods applicable to Services provided to Abercrombie & Fitch are
collectively referred to herein as the "Service Costs". Abercrombie & Fitch
agrees to pay to The Limited in the manner set forth in Section 3.5 the
Service Costs applicable to each of the Services provided or procured by The
Limited.
Section 3.2. Customary Billing. The costs of Services as to
which the Customary Billing method applies shall be equal to (i) the costs
charged to Abercrombie & Fitch by The Limited for such Services immediately
prior to the Effective Date (it being understood that from and after the
Effective Date such costs may be increased by The Limited in a manner
consistent with the manner in which such costs were increased from time to
time prior to the Effective Date) plus (ii) 5 percent. Notwithstanding the
foregoing, any out-of-pocket, third-party expenses incurred by The Limited in
connection with the provision of any Services as to which the Customary
Billing method applies shall be passed through to Abercrombie & Fitch without
the 5 percent xxxx-up.
Section 3.3. Pass-Through Billing. The costs of Services as
to which the Pass-Through Billing method applies shall be equal to the
aggregate amount of third-party, out-of-pocket costs and expenses incurred by
any Limited Entity on behalf of any Abercrombie & Fitch Entity. If a Limited
Entity incurs any such costs or expenses on behalf of any Abercrombie & Fitch
Entity as well as businesses operated by The Limited, The Limited will
allocate any such costs or expenses in good faith between the various
businesses on behalf of which such costs or expenses were incurred as The
Limited shall determine in the exercise of The Limited's reasonable judgment.
The Limited shall apply usual and accepted accounting conventions in making
such allocations, and The Limited or its agents shall keep and maintain such
books and records as may be reasonably necessary to make such allocations. The
Limited shall make copies of such books and records available to Abercrombie &
Fitch upon request and with reasonable notice.
Section 3.4. Certain Benefits Matters. (a) Prior to the
Effective Date, certain associates of Abercrombie & Fitch participated in
certain benefit plans sponsored by The Limited ("The Limited Plans").
(b) The costs payable by Abercrombie & Fitch for Services relating
to employee plans and benefit arrangements ("Benefits Services") shall be
determined and, to the extent specified in Schedule I, billed as set forth on
Schedule I. It is the express intent of the parties that Service Costs
relating to the administration of Abercrombie & Fitch employee plans and the
performance of related Services will not exceed reasonable compensation for
such Services as defined in 29 CFR Section 2550.408c-2.
(c) The Limited and Abercrombie & Fitch agree to cooperate fully
with each other in the administration and coordination of regulatory and
administrative requirements associated with The Limited Plans.
Section 3.5. Invoicing and Settlement of Costs. (a) The
Limited will invoice or notify Abercrombie & Fitch on a monthly basis (not
later than the tenth day of each month), in a manner substantially consistent
with the billing practices used in connection with services provided to the
Abercrombie & Fitch Entities prior to the Effective Date (except as otherwise
agreed), of the Service Costs. In connection with the invoicing described in
this Section 3.5(a), The Limited will provide to Abercrombie & Fitch the same
billing data and level of detail as it customarily provided to the Abercrombie
& Fitch Entities prior to the Effective Date and such other data as may be
reasonably requested by Abercrombie & Fitch.
(b) Abercrombie & Fitch agrees to pay on or before 30 days after
the date on which The Limited invoices or notifies Abercrombie & Fitch of the
Service Costs (or the next Business Day, if such day is not a Business Day)
(each, a "Payment Date") by wire transfer of immediately available funds
payable to the order of The Limited all amounts invoiced by The Limited
pursuant to this Section 3.5(a) during the preceding calendar month. If
Abercrombie & Fitch fails to pay any monthly payment within 30 days of the
relevant Payment Date, Abercrombie & Fitch shall be obligated to pay, in
addition to the amount due on such Payment Date, interest on such amount at
the prime, or best, rate announced by Banc One Corp. compounded monthly from
the relevant Payment Date through the date of payment.
ARTICLE 4
The Services
Section 4.1. General Standard of Service. Except as otherwise
agreed with Abercrombie & Fitch or described in this Agreement, and provided
that The Limited is not restricted by contract with third parties or by
applicable law, The Limited agrees that the nature, quality, and standard of
care applicable to the delivery of the Services hereunder will be
substantially the same as that of the Services which The Limited provides from
time to time throughout its businesses. The Limited shall use its reasonable
efforts to ensure that the nature and quality of Services provided to
Abercrombie & Fitch associates either by The Limited directly or through
administrators under contract shall be undifferentiated as compared with the
same services provided to or on behalf of The Limited associates under The
Limited Plans. Subject to The Limited's express obligations under this
Agreement, the management of and control over the provision of the Services
shall reside solely with The Limited. Without limiting the generality of the
foregoing, all labor matters relating to associates of The Limited and its
Subsidiaries (including, without limitation, associates involved in the
provision of Services to Abercrombie & Fitch) shall be within the exclusive
control of The Limited, and Abercrombie & Fitch and its Subsidiaries shall not
take any action affecting such matters.
Section 4.2. Delegation. Subject to Section 4.1 above,
Abercrombie & Fitch hereby delegates to The Limited final, binding, and
exclusive authority, responsibility, and discretion to interpret and construe
the provisions of employee welfare benefit plans in which Abercrombie & Fitch
has elected to participate and which are administered by The Limited under
this Agreement (collectively, "Employee Welfare Plans"). The Limited may
further delegate such authority to plan administrators to:
(i) provide administrative and other services;
(ii) reach factually supported conclusions consistent with
the terms of the Employee Welfare Plans;
(iii) make a full and fair review of each claim denial and
decision related to the provision of benefits provided or arranged for
under the Employee Welfare Plans, pursuant to the requirements of
ERISA, if within sixty days after receipt of the notice of denial, a
claimant requests in writing a review for reconsideration of such
decisions. The plan administrator shall notify the claimant in
writing of its decision on review. Such notice shall satisfy all
ERISA requirements relating thereto; and
(iv) notify the claimant in writing of its decision on
review.
Section 4.3. Limitation of Liability. (a) Abercrombie & Fitch
agrees that none of the Limited Entities and their respective directors,
officers, agents, and employees (each, a "Limited Indemnified Person") shall
have any liability, whether direct or indirect, in contract or tort or
otherwise, to any Abercrombie & Fitch Entity or any other Person for or in
connection with the Services rendered or to be rendered by any Limited
Indemnified Person pursuant to this Agreement, the transactions contemplated
hereby or any Limited Indemnified Person's actions or inactions in connection
with any such Services or transactions, except for damages which have resulted
from such Limited Indemnified Person's gross negligence or willful misconduct
in connection with any such Services, actions or inactions.
(b) None of the Limited Entities shall be liable for any special,
indirect, incidental, or consequential damages of any kind whatsoever
(including, without limitation, attorneys' fees) in any way due to, resulting
from or arising in connection with any of the Services or the performance of
or failure to perform The Limited's obligations under this Agreement. This
disclaimer applies without limitation (i) to claims arising from the provision
of the Services or any failure or delay in connection therewith; (ii) to
claims for lost profits; (iii) regardless of the form of action, whether in
contract, tort (including negligence), strict liability, or otherwise; and (iv)
regardless of whether such damages are foreseeable or whether The Limited has
been advised of the possibility of such damages.
(c) None of the Limited Entities shall have any liability to any
Abercrombie & Fitch Entity or any other Person for failure to perform The
Limited's obligations under this Agreement or otherwise, where (i) such
failure to perform is not caused by the gross negligence or wilful misconduct
of the Limited Entity providing such Services and (ii) such failure to perform
similarly affects the Limited Entities receiving such Services and does not
have a disproportionately adverse effect on the Abercrombie & Fitch Entities,
taken as a whole.
(d) In addition to the foregoing, Abercrombie & Fitch agrees that
it shall, in all circumstances, use commercially reasonable efforts to
mitigate and otherwise minimize its damages and those of the other Abercrombie
& Fitch Entities, whether direct or indirect, due to, resulting from or
arising in connection with any failure by The Limited to comply fully with its
obligations under this Agreement.
Section 4.4. Indemnification of The Limited by Abercrombie &
Fitch. Abercrombie & Fitch agrees to indemnify and hold harmless each Limited
Indemnified Person from and against any damages, and to reimburse each Limited
Indemnified Person for all reasonable expenses as they are incurred in
investigating, preparing, pursuing, or defending any claim, action,
proceeding, or investigation, whether or not in connection with pending or
threatened litigation and whether or not any Limited Indemnified Person is a
party (collectively, "Actions"), arising out of or in connection with Services
rendered or to be rendered by any Limited Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Limited Indemnified
Person's actions or inactions in connection with any such Services or
transactions; provided that Abercrombie & Fitch will not be responsible for
any damages of any Limited Indemnified Person that have resulted from such
Limited Indemnified Person's gross negligence or willful misconduct in
connection with any of the advice, actions, inactions, or Services referred to
above.
Section 4.5. Indemnification of Abercrombie & Fitch by The
Limited. The Limited agrees to indemnify and hold harmless the Abercrombie &
Fitch Entities and their respective directors, officers, agents, and employees
(each, a "Abercrombie & Fitch Indemnified Person") from and against any
damages, and will reimburse each Abercrombie & Fitch Indemnified Person for
all reasonable expenses as they are incurred in investigating, preparing, or
defending any Action, arising out of the gross negligence or willful
misconduct of any Limited Indemnified Person in connection with the Services
rendered or to be rendered pursuant to this Agreement.
Section 4.6. Further Indemnification. To the extent that any
other Person has agreed to indemnify any Limited Indemnified Person or to hold
a Limited Indemnified Person harmless and such Person provides services to The
Limited or any affiliate of The Limited relating directly or indirectly to any
employee plan or benefit arrangement for which Benefit Services are provided
under this Agreement, The Limited will exercise reasonable efforts (a) to make
such agreement applicable to any Abercrombie & Fitch Indemnified Person so
that each Abercrombie & Fitch Indemnified Person is held harmless or
indemnified to the same extent as any Limited Indemnified Person or (b)
otherwise make available to each Abercrombie & Fitch Indemnified Person the
benefits of such agreement.
Section 4.7. Notice of Certain Matters. If Abercrombie &
Fitch at any time believes that The Limited is not in full compliance with its
obligations under Section 4.1 of this Agreement, Abercrombie & Fitch shall so
notify The Limited in writing promptly (but not later than 30 days) after
becoming aware of such possible non-compliance by The Limited. Such notice (a
"Non-Compliance Notice") shall set forth in reasonable detail the basis for
Abercrombie & Fitch's belief as well as Abercrombie & Fitch's view as to the
steps to be taken by The Limited to address the possible non-compliance. For
the 30 days after receipt of such a notice, appropriate representatives of The
Limited and Abercrombie & Fitch shall work in good faith to develop a plan to
resolve the matters referred to in the Non-Compliance Notice. In the event
such matters are not resolved through such discussions, Abercrombie & Fitch
may elect to terminate The Limited's obligation to provide or procure, and its
obligation to purchase, the Service or Services referred to in its
Non-Compliance Notice in accordance with Section 5.2, but if it does not elect
to terminate such Service or Services within 60 days of the end of the 30-day
period referred to in the immediately preceding sentence, Abercrombie & Fitch
shall not be entitled to deliver another Non-Compliance Notice or pursue other
remedies with respect to same or any substantially similar matter.
ARTICLE 5
Term and Termination
Section 5.1. Term. Except as otherwise provided in this
Article 5, in Section 7.5 or as otherwise agreed in writing by the parties,
(a) this Agreement shall have a term of three years from the Effective Date
and (b) The Limited's obligation to provide or procure, and Abercrombie &
Fitch's obligation to purchase, a Service shall cease as of the applicable
date set forth in the applicable Schedules or such earlier date determined in
accordance with Section 5.2.
Section 5.2. Termination. (a) Abercrombie & Fitch may (i)
from time to time terminate this Agreement with respect to one or more of the
Services, in whole or in part, upon giving at least 30 days' prior notice to
The Limited or (ii) terminate this Agreement at any time upon 30 days'
written notice.
(b) The Limited may terminate any Service at any time if
Abercrombie & Fitch shall have failed to perform any of its material
obligations under this Agreement relating to any such Service, The Limited has
notified Abercrombie & Fitch in writing of such failure and such failure shall
have continued for a period of 30 days after receipt of Abercrombie & Fitch of
written notice of such failure.
(c) Abercrombie & Fitch may terminate any Service at any time if
The Limited shall have failed to perform any of its material obligations under
this Agreement relating to any such Service, Abercrombie & Fitch has notified
The Limited in writing of such failure, and such failure shall have continued
for a period of 30 days after receipt by The Limited of written notice of such
failure.
Section 5.3. Effect of Termination. (a) Other than as
required by law, upon termination of any Service pursuant to Section 5.2, and
upon termination of this Agreement in accordance with its terms, The Limited
will have no further obligation to provide the terminated Service (or any
Service, in the case of termination of this Agreement) and Abercrombie & Fitch
will have no obligation to pay any fees relating to such Services or make any
other payments hereunder; provided that notwithstanding such termination, (i)
Abercrombie & Fitch shall remain liable to The Limited for fees owed and
payable in respect of Services provided prior to the effective date of the
termination; (ii) The Limited shall continue to charge Abercrombie & Fitch for
administrative and program costs relating to benefits paid after but incurred
prior to the termination of any Service and other services required to be
provided after the termination of such Service and Abercrombie & Fitch shall be
obligated to pay such expenses in accordance with the terms of this Agreement;
and (iii) the provisions of Articles 4, 5, 6 and 7 shall survive any such
termination indefinitely. All program and administrative costs attributable
to associates of any of the Abercrombie & Fitch Entities for The Limited Plans
that relate to any period after the effective date of any such termination
shall be for the account of Abercrombie & Fitch.
(b) Following termination of this Agreement with respect to any
Service, The Limited and Abercrombie & Fitch agree to cooperate in providing
for an orderly transition of such Service to Abercrombie & Fitch or to a
successor service provider. Without limiting the foregoing, The Limited
agrees to (i) provide, within 30 days of the termination, copies in a format
designated by The Limited, of all records relating directly or indirectly to
benefit determinations of Abercrombie & Fitch associates, including but not
limited to compensation and service records, correspondence, plan interpretive
policies, plan procedures, administration guidelines, minutes, or any data or
records required to be maintained by law and (ii) work with Abercrombie &
Fitch in developing a transition schedule.
ARTICLE 6
Additional Agreements
Section 6.1. Confidential Information. (a) Abercrombie &
Fitch and The Limited hereby covenant and agree to hold in trust and maintain
confidential all Confidential Information relating to the other party or any
of such other party's Subsidiaries. Without limiting the generality of the
foregoing, Confidential Information relating to a party or any of its
Subsidiaries shall be disclosed only to those associates of the other party
who need to know such information in connection with their ordinary course
employment activities and in no event shall any such Confidential Information
be disclosed to any other Person. "Confidential Information" shall mean all
information, materials and processes relating to a party or any Subsidiary of
such party obtained by the other party or any Subsidiary of such other party at
any time (whether prior to or after the date hereof and whether in connection
with this Agreement or otherwise) in any format whatsoever (whether orally,
visually, in writing, electronically or in any other form) and shall include,
but not be limited to, economic and business information or data, business
plans, computer software and information relating to associates, vendors,
customers, products, fashion, design, stores, financial performance and
projections, processes, strategies, systems and real estate, but shall not
include (i) information which becomes generally available other than by
release in violation of the provisions of this Section 6.1, (ii) information
which becomes available on a non-confidential basis to a party from a source
other than the other party to this Agreement, provided the party in question
reasonably believes that such source is not or was not bound to hold such
information confidential and (iii) information acquired or developed
independently by a party without violating this Section 6.1 or any other
confidentiality agreement with the other party. Notwithstanding any provision
of this Section 6.1 to the contrary, a party may disclose such portion of the
Confidential Information relating to the other party to the extent, but only
to the extent, the disclosing party reasonably believes that such disclosure
is required under law or the rules of a securities exchange; provided that the
disclosing party first notifies the other party hereto of such requirement and
allows such party a reasonable opportunity to seek a protective order or other
appropriate remedy to prevent such disclosure. The parties acknowledge that
money damages would not be a sufficient remedy for any breach of the
provisions of this Section 6.1 and that the non-breaching party shall be
entitled to equitable relief in a court of law in the event of, or to prevent,
a breach or threatened breach of this Section 6.1.
(b) Notwithstanding the provisions of Section 6.1(a), upon a
Change of Control, Abercrombie & Fitch shall (i) promptly (but in no event
later than 30 days after the occurrence of such Change of Control) return to
The Limited or destroy all Confidential Information in its possession (or that
of any of its Subsidiaries) relating to The Limited or any of its Subsidiaries,
(ii) no longer be permitted to use such Confidential Information in its
business or operations (or the business or operations of any of its
Subsidiaries) and (iii) promptly (but in no event later than 30 days after the
occurrence of such Change of Control) deliver a written certificate to The
Limited executed by Abercrombie & Fitch's Chief Executive Officer expressly
acknowledging the obligations set forth in clauses (i) and (ii) of this
sentence and certifying that Abercrombie & Fitch has and will continue to
adhere to such requirements.
Section 6.2. Associate Matters. For so long as any operations
of Abercrombie & Fitch or of any of its Subsidiaries are located in any of The
Limited's facilities and for one year thereafter, each of The Limited and
Abercrombie & Fitch agrees that it will not, and will cause each of its
Subsidiaries not to, directly or indirectly, (i) solicit or otherwise attempt
to induce or influence any associate of the other party (or any of its
Subsidiaries) to leave employment with his or her then-current employer or
(ii) employ any associate of the other party (or any of its Subsidiaries).
Section 6.3. Financial Support Arrangements. (a) Abercrombie
& Fitch agrees to cooperate reasonably with any efforts undertaken by The
Limited or any of its Subsidiaries intended to release The Limited and its
Subsidiaries from their obligations under any guarantees (including, without
limitation, guarantees of lease obligations), letters of credit, surety bonds
and other financial support arrangements maintained as of the date hereof by
The Limited or any of its Subsidiaries in connection with the business or
operations of Abercrombie & Fitch or any of its Subsidiaries (collectively,
the "Financial Support Arrangements").
(b) If, after the date hereof, (i) any amounts are drawn on or
paid under any Financial Support Arrangement by The Limited or any of its
Subsidiaries or (ii) The Limited or any of its Subsidiaries pays any fees,
costs or expenses relating to any Financial Support Arrangement, Abercrombie &
Fitch shall reimburse The Limited for such amounts promptly after receipt from
The Limited of notice thereof accompanied by written evidence of the
underlying payment obligation.
Section 6.4. Insurance Matters. (a) From and after the date
of this Agreement, The Limited shall not, and shall cause each of its
Subsidiaries not to, take or fail to take any action if such action or
inaction, as the case may be, would adversely affect the applicability of any
insurance in effect on the date of this Agreement that covers all or any part
of the assets, liabilities, business or employees of Abercrombie & Fitch or
any Subsidiary of Abercrombie & Fitch with respect to events occurring prior
to the Effective Date ("Applicable Insurance"), it being understood that in no
event shall The Limited or any Subsidiary of The Limited be obligated to pay
premiums with respect to periods after the Effective Date in respect of
Applicable Insurance.
(b) The Limited agrees that, from and after the Effective Date,
all Applicable Insurance directly or indirectly applicable to any assets,
liabilities, business or employees of Abercrombie & Fitch or any Subsidiary of
Abercrombie & Fitch shall be for the benefit of Abercrombie & Fitch and the
Subsidiaries of Abercrombie & Fitch, it being understood that such Applicable
Insurance shall also be for the benefit of The Limited and its Subsidiaries to
the extent directly or indirectly applicable to any assets, liabilities,
business or employees of The Limited or any of its Subsidiaries. Without
limiting the generality of the foregoing, from and after the Effective Date
and upon Abercrombie & Fitch's reasonable request, The Limited shall use its
reasonable efforts to modify, amend or assign all Applicable Insurance
policies and arrangements so that Abercrombie & Fitch is the direct
beneficiary of such Applicable Insurance with all rights to enforce, obtain
the benefit of and take all other action in respect of such Applicable
Insurance; provided that, if the modifications, amendments or assignments
contemplated by this Section 6.4(b) are not permissible, The Limited shall,
and shall cause each of its Subsidiaries to, use its reasonable efforts to
enter into such other arrangements as Abercrombie & Fitch may reasonably
request to ensure that Abercrombie & Fitch and the Subsidiaries of Abercrombie
& Fitch are entitled to the benefit (to the fullest extent set forth in the
relevant policies and arrangements) of any Applicable Insurance.
ARTICLE 7
Miscellaneous
Section 7.1. Prior Agreements. In the event there is any
conflict between the provisions of this Agreement, on the one hand, and
provisions of prior services agreements among any Limited Entity and any of
the Abercrombie & Fitch businesses (the "Prior Agreements"), on the other
hand, the provisions of this Agreement shall govern and such provisions in the
Prior Agreements are deemed to be amended so as to conform with this Agreement.
Section 7.2. Future Litigation and Other Proceedings. In the
event that Abercrombie & Fitch (or any of its Subsidiaries or any of its or
their officers or directors) or The Limited (or any of its Subsidiaries or any
of its or their officers or directors) at any time after the date hereof
initiates or becomes subject to any litigation or other proceedings before any
governmental authority or arbitration panel with respect to which the parties
have no prior agreements (as to indemnification or otherwise), the party (and
its Subsidiaries and its and their officers and directors) that has not
initiated and is not subject to such litigation or other proceedings shall
comply, at the other party's expense, with any reasonable requests by the
other party for assistance in connection with such litigation or other
proceedings (including by way of provision of information and making available
of employees as witnesses). In the event that Abercrombie & Fitch (or any of
its Subsidiaries or any of its or their officers or directors) and The Limited
(or any of its Subsidiaries or any of its or their officers or directors) at
any time after the date hereof initiate or become subject to any litigation or
other proceedings before any governmental authority or arbitration panel with
respect to which the parties have no prior agreements (as to indemnification or
otherwise), each party (and its officers and directors) shall, at their own
expense, coordinate their strategies and actions with respect to such
litigation or other proceedings to the extent such coordination would not be
detrimental to their respective interests and shall comply, at the expense of
the requesting party, with any reasonable requests of the other party for
assistance in connection therewith (including by way of provision of
information and making available of employees as witnesses).
Section 7.3. No Agency. Nothing in this Agreement shall
constitute or be deemed to constitute a partnership or joint venture between
the parties hereto or, except to the extent provided in Section 4.2,
constitute or be deemed to constitute any party the agent or employee of the
other party for any purpose whatsoever and neither party shall have authority
or power to bind the other or to contract in the name of, or create a
liability against, the other in any way or for any purpose.
Section 7.4. Subcontractors. The Limited may hire or engage
one or more subcontractors to perform all or any of its obligations under this
Agreement; provided that, subject to Section 4.3, The Limited will in all
cases remain primarily responsible for all obligations undertaken by it in
this Agreement with respect to the scope, quality and nature of the Services
provided to Abercrombie & Fitch.
Section 7.5. Force Majeure. (a) For purposes of this Section,
"force majeure" means an event beyond the control of either party, which by
its nature could not have been foreseen by such party, or, if it could have
been foreseen, was unavoidable, and includes without limitation, acts of God,
storms, floods, riots, fires, sabotage, civil commotion or civil unrest,
interference by civil or military authorities, acts of war (declared or
undeclared) and failure of energy sources.
(b) Without limiting the generality of Section 4.3(a), neither
party shall be under any liability for failure to fulfill any obligation under
this Agreement, so long as and to the extent to which the fulfillment of such
obligation is prevented, frustrated, hindered, or delayed as a consequence of
circumstances of force majeure; provided that such party shall have exercised
all due diligence to minimize to the greatest extent possible the effect of
force majeure on its obligations hereunder.
(c) Promptly on becoming aware of force majeure causing a delay in
performance or preventing performance of any obligations imposed by this
Agreement (and termination of such delay), the party affected shall give
written notice to the other party giving details of the same, including
particulars of the actual and, if applicable, estimated continuing effects of
such force majeure on the obligations of the party whose performance is
prevented or delayed. If such notice shall have been duly given, and actual
delay resulting from such force majeure shall be deemed not to be a breach of
this Agreement, and the period for performance of the obligation to which it
relates shall be extended accordingly; provided that if force majeure results
in the performance of a party being delayed by more than 60 days, the other
party shall have the right to terminate this Agreement with respect to any
Service effected by such delay forthwith by written notice.
Section 7.6. Entire Agreement. This Agreement (including the
Schedules constituting a part of this Agreement) and any other writing signed
by the parties that specifically references this Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements, understandings and negotiations, both
written and oral, between the parties with respect to the subject matter
hereof. This Agreement is not intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
Section 7.7. Information. Subject to applicable law and
privileges, each party hereto covenants and agrees to provide the other party
with all information regarding itself and transactions under this Agreement
that the other party reasonably believes are required to comply with all
applicable federal, state, county and local laws, ordinances, regulations and
codes, including, but not limited to, securities laws and regulations.
Section 7.8. Notices. Any notice, instruction, direction or
demand under the terms of this Agreement required to be in writing will be
duly given upon delivery, if delivered by hand, facsimile transmission,
intercompany mail, or mail, to the following addresses:
(a) If to Abercrombie & Fitch, to:
Abercrombie & Fitch Co.
Four Limited Parkway
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Fax: 000-000-0000
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
Section 7.9. Governing Law. This Agreement shall be construed
in accordance with and governed by the substantive internal laws of the State
of Delaware.
Section 7.10. Dispute Resolution. Subject to Sections 6.1 and
6.2, the parties hereto agree that any dispute arising out of or in connection
with this Agreement or the transactions contemplated hereby shall be submitted
to arbitration. The parties shall negotiate in good faith and use all
reasonable efforts to agree upon a resolution of any dispute after receipt of
written notice of such dispute from a party. If the parties cannot agree on
an amicable settlement within 30 days from written submission of the matter by
the party to the other party, the matter shall be submitted to arbitration.
Each party shall select one arbitrator, and the two arbitrators so appointed
shall select a third arbitrator. In the event such arbitrators cannot agree
upon a third arbitrator, a third arbitrator shall be selected in accordance
with the rules as then in effect of the American Arbitration Association. The
decision of two of the three arbitrators so appointed shall be conclusive and
binding upon the parties to this Agreement. Any such arbitration shall be
held in Columbus, Ohio under the rules to be mutually agreed upon by the
arbitrators selected by the parties or, if no such agreement can be reached,
under the rules as then in effect of the American Arbitration Association.
Each party to any such arbitration shall pay its own expenses; provided that
the fees, costs and expenses of the third arbitrator shall be borne equally by
the parties.
Section 7.11. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 7.12. Severability. If any provision of this
Agreement shall be invalid or unenforceable, such invalidity or
unenforceability shall not render the entire Agreement invalid. Rather, the
Agreement shall be construed as if not containing the particular invalid or
unenforceable provision, and the rights and obligations of each party shall be
construed and enforced accordingly.
Section 7.13. Amendment. This Agreement may only be amended
by a written agreement executed by both parties hereto.
Section 7.14. Counterparts. This Agreement may be executed in
separate counterparts, each of which shall be deemed an original and all of
which, when taken together, shall constitute one agreement.
Section 7.15. Services to The Limited. Abercrombie & Fitch
agrees to permit the Limited Entities to use the trademarks and service marks
owned by the Abercrombie & Fitch Entities at no cost to any Limited Entity in
The Limited's annual reports to shareholders for fiscal years 1997 and 1998 and
publicity materials and for other similar purposes through the end of fiscal
year 1998.
Section 7.16. Termination of Old Services Agreement.
Effective as of the date hereof, The Limited's obligation to provide or
procure, and Abercrombie & Fitch's obligation to purchase, services under the
Old Services Agreement shall terminate automatically without any further
action by any party.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their duly authorized representatives.
ABERCROMBIE & FITCH CO.
By:
-------------------------
Name:
Title:
THE LIMITED, INC.
By:
-------------------------
Name:
Title:
Human Resources and Benefits Services - Schedule I
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate three months after the Effective Date.
Service Billing Methodology
------- -------------------
Medical/Dental Programs
Benefits/Claims Customary Billing
---------------
o Claims costs for Abercrombie &
Fitch Associates participating in
the following Limited Plans and
programs:
o Medical Plan
o Short Term Disability Plan
o Prescription Drug Plan
o Dental Plan
Administration Customary Billing
--------------
o Administration of above
Abercrombie & Fitch plans and
programs, including
o maintenance of eligibility
files upon Abercrombie &
Fitch's notification of status
changes
o claim adjudication under the
terms of applicable plans
o maintenance of toll-free
telephone lines for inquiries,
etc.
o support services (internal and
external, including COBRA)
Participant Contributions
-------------------------
o Participant contributions for Participant
deductions above plans or direct Payroll
xxxx to associates/retirees
Other Benefit Plans
Life Insurance Customary Billing
--------------
o Life insurance for Abercrombie &
Fitch Associates (including
Accidental Death and
Dismemberment)
Savings/Retirement Plans
------------------------
o Company match/retirement Customary Billing
contribution
o Participant Contributions Payroll Deduction
Long-Term Disability Plans
--------------------------
o Employer contributions Customary Billing
o Associate contributions Payroll Deduction
Other Benefit Support Services Customary Billing
o Audit, Legal, Actuarial Fees and
related recoveries
o Payroll support of benefits
administration (insurance,
savings, other benefit plans and
statutory requirements)
Employee Stock Purchase Program Customary Billing
o Payroll services
Information Technology Service - Schedule II
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate on the first anniversary of the Effective Date. The costs for
the services on this Schedule shall be billed using the Customary Billing
method.
Data Center Services
Computing services consistent with services provided to Abercrombie & Fitch in
the past, including:
o providing the following operating environments:
o MVS environment at or above the current release of MVS SP6.0.3
o Hardware environment to execute the MVS operating system described
above
o IBM CICS environments for Test and Production applications at or
above the current release of 2.1 and 4.1, respectively
o providing the following software:
o IBM Database 12, Version 5.1
o IBM TSO/ISPF, release 4.4
o IBM VSAM and IDCAMS software
o IBM ADDCOM, NDM, PNMS and GIX for store polling support
o Compuware File-Aid software, release 8.0.1
o SAS Institute Base SAS, release 6.09
o Maintain scheduling software to run the production job streams.
o Balance job streams as a means of controlling production applications.
o Maintain current print distribution by DC4 operations.
o Provide monitoring reports for Abercrombie & Fitch I.T. management.
o Provide data transmission to other entities. ( e.g., banks).
o Maintain the Abercrombie & Fitch Polling modems in the DC3 data center.
o Maintain hardware for tape and DASD support.
o Maintain current connectivity to the SNA network at the Abercrombie &
Fitch offices in Reynoldsburg.
o Sufficient spool capacity for reports to laser and impact printers.
o Maintain storage libraries for Abercrombie & Fitch to store Test and
Production source code and object code, including ADCSLIB, ASM,
COBOL, CNTL, PROCLIB, COPYLIB, MAPLIB, PARMLIB, SAS, VSAM and DOC
libraries.
Year 2000 Services
o Maintain a testing environment consistent with other Limited Inc.
businesses for compliance testing of MVS systems.
o Allow Abercrombie & Fitch to complete work under the Limited Project
Management Office towards meeting ITAA standards for Year 2000.
Technical Services
o Technical support for physical data in DB/2 and VSAM.
o Technical support for SNA and VTAM.
o Technical support for system usage. ( i.e. new users, RACF ID's).
Telecommunications Services
o Provide move/add/change services to Reynoldsburg offices
o Maintain telecom switch and connections to Ameritech and MCI.
Point-of-Sale Help Desk Services
o Provide the current point-of-sale help desk support from Limited
stores at or above current levels.
Distribution Center Services - Schedule III
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate on the third anniversary of the Effective Date. The following
merchandise will not be commingled with other Limited Inc. businesses without
the prior written approval of Abercrombie & Fitch. The costs for the services
on this Schedule shall be billed using the Customary Billing method, except as
otherwise indicated.
Labor Services
The Limited's Distribution Center is to provide a fully dedicated management
staff with the ability to obtain and provide full-time, part-time and
temporary help on an as-needed basis to perform the following processes:
o Receive goods using current methodology, including the following:
o A sample of receipts pre-counted.
o Receipts "key-received" and data entered into the Abercrombie &
Fitch warehouse system.
o Samples of merchandise receipts selected for inspection.
o Receipts extracted to either be warehoused in backstock or
processed to stores as determined by the distribution methodology
of Abercrombie & Fitch.
o Handle receipts that require special handling such as ticketing,
re-ticketing, sorting, quality inspection, marketing applied, etc. in
the same manner as exists currently.
o Process merchandise to stores in accordance with the allocation
methodology of Abercrombie & Fitch.
o Handle procedures for handling color, size or unit differences
from the allocation specified by Abercrombie & Fitch in accordance
with existing Abercrombie & Fitch procedures.
o Data enter merchandise allocation pick cards once a store carton
has been filled.
o Cycle count warehoused merchandise with the goal of cycling through
the Abercrombie & Fitch merchandise once each quarter.
o New store merchandise to be sensor-tagged by the distribution center
prior to shipment.
o Magazine merchandise to be poly-bagged by the distribution center
prior to shipment.
o Ship completed cartons with appropriate store labels through Limited
Distribution Services, Inc. ("LDS") to final destination.
o In cases where LDS is not used, ship completed cartons with
appropriate store labels through a carrier approved by Abercrombie &
Fitch to final destination.
Supplies
All purchases for the distribution center to remain the responsibility of the
landlord. The current procedure of tracking Abercrombie & Fitch supply
purchases through purchase orders to remain in effect.
Engineering Services
Provide use of Limited's engineering services for the purposes of distribution
center and home office modifications within the Limited campuses as well as
design, site selection, construction and other services necessary to enable
Abercrombie & Fitch to design and construct its own distribution center and
office facility to move to upon the expiration this Agreement.
Fixtures
o It is understood that the Abercrombie & Fitch Distribution Center is
scheduled to relocate from its current facility to an other facility
owned by The Limited, with such relocation to be effected on or prior
to September 1, 1998. In connection with such relocation, The
Limited will purchase on Abercrombie & Fitch's behalf (with
Abercrombie & Fitch to reimburse The Limited promptly for all such
purchases) hangers, racks and other equipment (the "Distribution
Center Equipment") required to operate such new Distribution Center
in the manner agreed by Abercrombie & Fitch and The Limited prior to
the date hereof. It is understood that the cost of such hangers,
racks and other equipment is expected to be approximately $8 million.
o The Limited shall have the option (but not the obligation) to
purchase the Distribution Center Equipment relating to any portion of
the Distribution Center occupied by Abercrombie & Fitch, in whole or
in part, upon the termination of Abercrombie & Fitch's occupancy of
such portion of the Distribution Center, at Net Book Value. "Net
Book Value" of any Distribution Center Equipment shall mean the net
book value of such equipment, calculated in accordance with generally
accepted accounting principles using the normal asset lives (seven
to ten years) of such Distribution Center Equipment. The Limited
must provide written notice of its desire to exercise such option (i)
15 days after receipt by The Limited of written notice from
Abercrombie & Fitch of its desire to terminate early its lease or
sublease relating to its Distribution Center and home office premises
or (ii) 30 days prior to the scheduled termination of such lease or
sublease. Any Distribution Center Equipment which is not purchased
by The Limited shall be dismantled and removed from the leased
Distribution Center premises by Abercrombie & Fitch at its sole cost
upon the termination of its occupancy of such premises.
o Except for the arrangements with respect to the Distribution Center
Equipment set forth above, all further capital improvements to the
Distribution Center shall be the sole responsibility of Abercrombie &
Fitch.
o In the event of a Change of Control involving a Person which competes
with any current business of The Limited or any of its Subsidiaries,
The Limited and Abercrombie & Fitch will work in good faith and use
their reasonable best efforts to develop a plan whereby Abercrombie &
Fitch relocate from any facilities owned by The Limited as promptly
after the Change of Control as is reasonably practicable.
Transportation Services Agreement - Schedule IV
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate on the earlier to occur of (i) the third anniversary of the
Effective Date and (ii) the date on which Abercrombie & Fitch no longer
utilizes a distribution center located on a facility owned by The Limited or
any of its Subsidiaries. It is understood that The Limited's obligation to
provide or procure the services referred to in this Schedule IV is limited to
the provision or procurement of such services in distribution centers located
on a facility owned by The Limited or any of its Subsidiaries.
Transportation and Logistic Services Billing Methodology
to be Provided by Limited Distribution
Services, Inc. ("LDS")
o Transport merchandise from a foreign Pass-Through Billing
factory to Abercrombie & Fitch's
Columbus, Ohio distribution center
(the "Distribution Center"),
including the following:
o Continue to negotiate price
arrangements with certain
carriers to transport merchandise
from an overseas designated FOB
point to the Distribution Center.
o Continue to monitor and enforce
the selected carriers' negotiated
performance standards.
o Allow Abercrombie & Fitch access
to the LDS "LIFTS" freight
tracking system to track both
Abercrombie & Fitch and MAST
deliveries.
o Continue to negotiate rates and
service levels for Container
Freight Stations ("CFS") who
receive bonded freight in
Columbus, Ohio for delivery to
the Distribution Center.
o Continue to monitor and enforce
the CFS' negotiated performance
standards.
o Transport merchandise from the Customary Billing
Distribution Center to Abercrombie &
Fitch store locations, including the
following:
o Continue to arrange outbound
ground transportation from the
Distribution Center to
Abercrombie & Fitch store
locations.
o Negotiate price for all ground
carriers used to transport
merchandise to final destination.
o Transport merchandise from domestic Pass-Through Billing
factories to the Distribution
Center, including the following:
o Negotiate rates for carriers to
retrieve merchandise from
domestic factory locations and
deliver that merchandise to the
Distribution Center.
o Ensure availability of LDS
carriers to transport merchandise
between Abercrombie & Fitch
stores. Carrier rates to be
negotiated by LDS.
Store Planning Services - Schedule V
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate on the first anniversary of the Effective Date. The Limited
and Abercrombie & Fitch agree that the capitalized construction costs for the
services described in this Schedule shall be billed upon the completion of the
construction of a store, and that Abercrombie & Fitch shall pay such costs for
each store within 30 days after the opening of such store. Costs for services
other than capitalized construction costs shall be billed in accordance with
the Customary Billing Methodology.
Store Planning Services to be provided Billing Methodology
by Limited Store Planning
Limited Store Planning, Inc. ("LSP") Customary Billing
will provide the following services to
Abercrombie & Fitch for Abercrombie &
Fitch stores to be opened or remodeled
in 1998:
o Initial design of space
o Production of architectural and
mechanical drawings of the store
design
o Construction of store to drawing
specifications
o Purchasing, shipment, and
installation of materials
o Project management and accumulation
of capital costs
o Assisting Abercrombie & Fitch as
necessary in the transition of
responsibility from LSP to
Abercrombie & Fitch, including the
transfer of following:
o Store design plans
o Project management software
o Information pertaining to
contractors, suppliers, and other
non-Limited resources used in the
design and construction of
Abercrombie & Fitch stores
Real Estate Services - Schedule VI
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate on the first anniversary of the Effective Date. The costs for
the services on this Schedule shall be billed using the Customary Billing
method.
Real Estate Services to be provided by Limited Real Estate
Limited Real Estate ("LRE") will provide the following services to Abercrombie
& Fitch:
o Complete necessary deal follow-up and legal work for all deals in
process at the Effective Date.
o Provide Abercrombie & Fitch with the following:
o Leasing files, center maps, leasing plans and contact person
information for:
o all existing Abercrombie & Fitch locations.
o the top 600 centers.
o premier specialty centers.
o The Limited's list of developers, corporate offices, contacts,
phone numbers, etc.
o Copies of PCR's and ROA's for all existing and approved
Abercrombie & Fitch deals.
o Copies, including disc copies, if applicable, of existing form
leases with developers and Limited form leases.
o Copies of all Abercrombie & Fitch leases.
o Current version of the in-house developed real estate system and
data.
o Allow Abercrombie & Fitch to participate in the consolidated utility
management system related to deregulation.
Tax Services- Schedule VII
The Limited's obligation to provide or procure, and Abercrombie
& Fitch's obligation to purchase, the services described in this Schedule
shall terminate no later than the filing due date for the income tax returns
of Abercrombie & Fitch for fiscal year 1998. The costs for the services on
this Schedule shall be billed using the Customary Billing method.
The Limited will:
o provide assistance and coordinate with outside tax accountants and
professional as is reasonably necessary for the preparation and filing
of the following income tax returns of Abercrombie & Fitch:
o federal consolidated income tax returns for the tax periods ending
on or before January 30, 1999.
o combined and separate state income or franchise tax returns for
tax periods ending on or before January 30, 1999.
o assist Abercrombie & Fitch in preparing tax packages and determining
the amount of estimated income tax installments for the federal and
state income taxes for the tax periods described above.
o assist Abercrombie & Fitch to the extent necessary in the transition
of tax responsibility from The Limited to Abercrombie &Fitch, by
o providing access to various tax resources of The Limited, including
tax library, tax software and tax personnel;
o allowing a designated Abercrombie & Fitch person to observe, learn
and participate in the planning, preparation and filing of
Abercrombie &Fitch income tax returns described above; and
o providing tax planning services regarding Abercrombie & Fitch's
income taxes for the tax periods described above.
