FULFILLMENT AND CUSTOMER SERVICE SERVICES AGREEMENT
THIS FULFILLMENT AND CUSTOMER SERVICE SERVICES AGREEMENT, is made and
entered into as of October 2, 2000 (including all Exhibits hereto, the
"Agreement"), between Infinity Resources, Inc., an Illinois corporation
("Infinity Resources"), and ▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation
("▇▇▇▇▇▇▇.▇▇▇"). Certain terms used in this Agreement are defined in Section
13.1.
WHEREAS, Infinity Resources and Critics' Choice Video, Inc., an Illinois
corporation ("CCV") and subsidiary of PEI, are parties to the Asset Purchase
Agreement, dated the date hereof (the "Asset Purchase Agreement");
WHEREAS, the Asset Purchase Agreement sets forth as a condition precedent
to the obligations of each of the parties thereto to close the transactions
contemplated by the Asset Purchase Agreement that this Agreement be entered into
by the parties hereto; and
WHEREAS, the parties hereto now desire to carry out the intent and purpose
of the Asset Purchase Agreement by executing and delivering this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the parties agree as follows:
1. Purpose.
1.1 Appointment. During the Term of this Agreement (as defined in
Section 6.4 below), ▇▇▇▇▇▇▇.▇▇▇ appoints Infinity Resources, and Infinity
Resources agrees to serve, as ▇▇▇▇▇▇▇.▇▇▇'s primary warehousing, fulfillment and
customer service provider. ▇▇▇▇▇▇▇.▇▇▇ agrees to use commercially reasonable
efforts to ensure that Infinity Resources is its provider of such services for
no less than ninety percent (90%) of all products for which ▇▇▇▇▇▇▇.▇▇▇ is the
principal, excluding without limitation affiliate sales and products which are
shipped directly from a manufacturer.
1.2 Transition. Infinity Resources acknowledges that ▇▇▇▇▇▇▇.▇▇▇ has
previously received its warehousing, fulfillment and customer service from PEI,
which PEI managed through certain inventory and order management systems.
Infinity Resources agrees to utilize and provide ▇▇▇▇▇▇▇.▇▇▇ with inventory and
order management systems which provide features and functionality at least as
comprehensive as PEI's inventory and order management systems and which at a
minimum will include the features and functionality set forth in Exhibit A.
Without limiting the foregoing, in the event that Infinity Resources replaces
either or both of the Purchase Order System or Order Management System, it will
promptly integrate such successor systems to perform the same functionality as
the systems in place as of the date hereof.
2. Product Receipt and Warehousing.
2.1 Product Receipt.
(a) ▇▇▇▇▇▇▇.▇▇▇ shall enter purchase orders for products to be
supplied by ▇▇▇▇▇▇▇.▇▇▇'s vendors into the Purchase Order System. Infinity
Resources will receive all delivered products from ▇▇▇▇▇▇▇.▇▇▇ and/or
▇▇▇▇▇▇▇.▇▇▇'s vendors (the "Products").
(b) Upon receipt, Infinity Resources will unload the Products,
perform a quantity count and verification, conduct a damage check and
assessment, process the receipt of inventory and warehouse the Products in
accordance with Section 2.2.
2.2 Warehousing.
(a) During the Term of this Agreement, Infinity Resources
shall use commercially reasonable means to receive, handle, store and protect
the Products from damage, theft and other adverse events.
(b) Infinity Resources shall store the Products in a secured
facility. Only Infinity Resources' employees and agents and ▇▇▇▇▇▇▇.▇▇▇'s
authorized employees and agents will have access to the Products. In addition,
Infinity Resources shall maintain a separate area of the Warehouse Facilities
with locked and secured access, including, but not limited to, a security cage
(the "Secured Area"). ▇▇▇▇▇▇▇.▇▇▇ may designate a reasonable amount of inventory
as High Risk Products, which shall be stored in the Secured Area. Furthermore,
▇▇▇▇▇▇▇.▇▇▇ acknowledges that Infinity Resources provides warehousing services
to third parties and that not all of the Products will be maintained in areas of
the Warehouse Facilities which are separate from such third parties' inventory.
Notwithstanding the foregoing, Infinity Resources shall take all reasonable
measures to ensure that ▇▇▇▇▇▇▇.▇▇▇'s inventory is secure and clearly marked as
▇▇▇▇▇▇▇.▇▇▇'s inventory.
(c) ▇▇▇▇▇▇▇.▇▇▇ shall have the right to inspect the Products
upon receipt by Infinity Resources and shall have the right to reject such
Products; provided, however, that Infinity Resources shall bear no liability for
such rejected Products. Infinity Resources shall provide a holding area for
Products received whose acceptability is questionable. ▇▇▇▇▇▇▇.▇▇▇ will advise
on the disposition of such Products within ten (10) Business Days of
notification by Infinity Resources.
(d) Infinity Resources shall conduct cycle counts in order to
assure the accuracy of the inventory. If stock differences are found in any
inventory, Infinity Resources will list gains as receipts, and losses as
deductions, thus correcting the book record to agree with the actual Products on
hand. These changes will be made on an ongoing basis; provided, however, that
Infinity Resources shall promptly notify ▇▇▇▇▇▇▇.▇▇▇ in writing when such
changes are made. Infinity Resources will take such additional physical
inventories as reasonably requested by ▇▇▇▇▇▇▇.▇▇▇ upon advanced written notice
of no less than two (2) Business Days, the actual costs of which shall be at
▇▇▇▇▇▇▇.▇▇▇'s expense. Representatives of ▇▇▇▇▇▇▇.▇▇▇ may be present during any
inventory.
3. Customer Service, Order Processing and Order Fulfillment.
3.1 Customer Service. Infinity Resources shall provide first-level
customer service to the customers of ▇▇▇▇▇▇▇.▇▇▇ (the "Customers") in accordance
with Exhibit B.
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3.2 Order Processing. Infinity Resources shall process E-Commerce
Orders and Direct Commerce Orders in accordance with Exhibit B.
3.3 Order Fulfillment.
(a) After receipt of an order, Infinity Resources will (i)
fill the order from the inventory of Products at the Warehouse Facilities, (ii)
insert all packing slips in accordance with Section 3.3(c) below, (iii) if
requested, gift wrap the Products, and (iv) pursuant to ▇▇▇▇▇▇▇.▇▇▇'s
instructions, and based upon availability of Products in stock, ship the order
to Customers either as a multiple shipment or as one shipment. Infinity
Resources shall use a common carrier reasonably acceptable to ▇▇▇▇▇▇▇.▇▇▇. In
the event that Infinity Resources does not have a product in stock in order to
fulfill an order (a "Backordered Product"), Infinity Resources agrees to act in
accordance with Section 3.3(e) below. Furthermore, Infinity Resources shall
obtain written approval from ▇▇▇▇▇▇▇.▇▇▇ before changing agreed-upon common
carriers.
(b) Infinity Resources will acknowledge receipt of orders to
▇▇▇▇▇▇▇.▇▇▇ on the Order Management System. Acknowledgment will be made promptly
after an order is received and will identify the availability of the Products.
(c) Infinity Resources will print all packing slips (other
than special inserts), including printing the text of any special message
requested by ▇▇▇▇▇▇▇.▇▇▇ on the standard packing slip. Infinity Resources will
insert the standard packing slip and all additional packing slips requested by
▇▇▇▇▇▇▇.▇▇▇, including special inserts provided by ▇▇▇▇▇▇▇.▇▇▇; provided,
however, that (i) ▇▇▇▇▇▇▇.▇▇▇ will bear the cost of providing such special
inserts and additional packing slips and (ii) all ▇▇▇-▇▇▇▇▇▇▇.▇▇▇ inserts shall
be approved by ▇▇▇▇▇▇▇.▇▇▇. Furthermore, Infinity Resources will print and affix
shipping labels on orders being shipped to Customers as part of its fulfillment
obligations hereunder.
(d) Infinity Resources will make available on its Order
Management System the following daily reports to ▇▇▇▇▇▇▇.▇▇▇:
(i) all orders filled by Infinity Resources on the
preceding Business Day and which includes the following information for each
such order: the order number, the Customer's name and address, an itemization of
Products shipped, the price charged by Infinity Resources to ▇▇▇▇▇▇▇.▇▇▇ for
each Product and shipping and handling charges to Customers and to ▇▇▇▇▇▇▇.▇▇▇;
(ii) all Product returns (identified by invoice number)
processed by Infinity Resources for the preceding Business Day and indicating
quantity and invoice amount; and
(iii) all orders canceled on the preceding Business Day
and which includes the following information for each canceled order: the order
number, the Customer's name, the title of each Product, the quantity of all
Products and the customer service representative who canceled the order on
behalf of the Customer.
(e) Infinity Resources shall promptly enter into the Order
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Management System any Backordered Products so that ▇▇▇▇▇▇▇.▇▇▇ may promptly
identify which Products need to be supplied. Upon receipt of any Backordered
Products, Infinity Resources shall follow the procedures set forth in Section
3.3(a). For purposes of Section 3.3(a), orders for Backordered Products shall be
deemed to have been placed upon the date the Backordered Products are received
into inventory by Infinity Resources.
3.4 Other Services. In the event that ▇▇▇▇▇▇▇.▇▇▇ requires services
that exceed the scope or extent of the Services provided for herein, including,
but not limited to, gift certificate support, coupon support and other premium
services ("New Services"), and if Infinity Resources agrees to provide such New
Services, ▇▇▇▇▇▇▇.▇▇▇ and Infinity Resources shall negotiate in good faith the
terms and conditions, including price, under which Infinity Resources shall
provide New Services; provided, however, that the fee payable by ▇▇▇▇▇▇▇.▇▇▇ for
any New Services shall be no less favorable to ▇▇▇▇▇▇▇.▇▇▇ than the charges for
comparable services provided by Infinity Resources to any third party. In the
event that the parties agree to New Services, the scope and duration of the New
Services shall be described in an addendum to the appropriate Exhibit hereto and
thereafter such New Services shall be considered Services hereunder. ▇▇▇▇▇▇▇.▇▇▇
may elect to reduce or terminate any of the New Services upon thirty (30) days
prior written notice to Infinity Resources. Except as otherwise provided herein,
to the extent ▇▇▇▇▇▇▇.▇▇▇ elects to reduce or terminate any of the Services or
to the extent the parties mutually agree to cancel or terminate any of the New
Services, such services shall be deemed modified or deleted, as applicable, from
the appropriate Exhibit hereto, with the remaining services thereafter
constituting the Services.
3.5 Service Levels.
(a) Except as the parties may otherwise mutually agree,
Infinity Resources shall provide and perform the Services at levels of service
Substantially similar to the levels of service provided to ▇▇▇▇▇▇▇.▇▇▇ by PEI or
one or more of its Affiliates prior to the date hereof (the "Effective Date"),
and in any event with the same degree of care, skill and prudence customarily
exercised by it for its own operations.
(b) ▇▇▇▇▇▇▇.▇▇▇ may request a reduction or termination of any
(or all) of the Services upon ninety (90) days written notice in the event that
▇▇▇▇▇▇▇.▇▇▇ ceases to be in the direct commerce or e-commerce business.
▇▇▇▇▇▇▇.▇▇▇ hereby represents and warrants that as of the effective date of this
Agreement, it has no intention of ceasing to be in either the direct commerce or
e-commerce business.
(c) Infinity Resources agrees to provide the Services in
accordance with the Service Performance Levels set forth on Exhibit C. In the
event that a particular Service falls below the applicable Service Performance
Level, ▇▇▇▇▇▇▇.▇▇▇ shall provide written notice to Infinity Resources of such
failure to perform. If Infinity Resources is unable to cure any failure to
perform such Services in accordance with the Service Performance Levels within
two (2) weeks of receipt of notice, ▇▇▇▇▇▇▇.▇▇▇ shall be entitled to a credit
equal to ten percent (10%) of fees in respect of all Services falling below
Service Performance Levels (the "Deficient Services"). Such credit shall appear
on the invoice for the month immediately following the month in which Deficient
Services were provided.
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(i) In the event that Infinity Resources cures the
Deficient Services within the two (2) week period following notice but fails to
maintain the Service Performance Levels for a period of thirty (30) days
following the date of such cure, ▇▇▇▇▇▇▇.▇▇▇ shall be entitled to a credit on
all Deficient Services retroactive to the date of the initial notice.
(ii) In the event that Infinity Resources cures the
Deficient Services at anytime following notice but fails to maintain the Service
Performance Levels for a period of ninety (90) days following the first date of
notice ("First Notice Date"), ▇▇▇▇▇▇▇.▇▇▇ shall notify Infinity Resources (in
accordance with Section 3.5(c)) that the Services have again become deficient
and afford Infinity Resources another opportunity to cure. If the provision of
such Services by Infinity Resources falls below the Service Performance Levels
three (3) times within ninety (90) days of the First Notice Date, then such
repeated deficiencies shall be deemed an uncured material breach, entitling
▇▇▇▇▇▇▇.▇▇▇ to terminate this Agreement pursuant to Section 6.3(a).
3.6 Insurance. Infinity Resources shall maintain at all times during
the Term of this Agreement insurance as provided below and shall name
▇▇▇▇▇▇▇.▇▇▇ as an additional insured to the extent of indemnity provided herein
under its liability policies as follows:
(a) Commercial general liability insurance including
premises/operations, broad form property damage, independent contractors, and
contractual liability covering Infinity Resources' obligations hereunder for
bodily injury and property damage, with a combined single limit of not less than
$1,000,000 each occurrence and $5,000,000 umbrella coverage.
(b) Workers' compensation insurance in statutory amounts
covering Infinity Resources and its employees, and employer's liability
insurance in an amount not less than $500,000 per accident/disease.
(c) All insurance required above shall be carried with
insurance companies licensed to do business in the state(s) where operations are
maintained. Infinity Resources shall deliver to ▇▇▇▇▇▇▇.▇▇▇, upon ▇▇▇▇▇▇▇.▇▇▇'s
request, certificates of insurance as evidence of the required coverages.
Infinity Resources agrees that these policies shall not be canceled or
materially changed without at least thirty (30) days prior written notice to
▇▇▇▇▇▇▇.▇▇▇.
4. Returns.
4.1 Each shipment of Products to Customers will include
▇▇▇▇▇▇▇.▇▇▇'s then-current return policy (the "Return Policy") as supplied by
▇▇▇▇▇▇▇.▇▇▇, including instructions that Customers are to make returns of
Products to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or to such other address as
mutually agreed upon by the parties.
(a) Within two (2) Business Days of receipt by Infinity
Resources, all returned Products will be logged as having been received and
placed back in stock, if applicable, or held aside for ▇▇▇▇▇▇▇.▇▇▇ personnel to
inspect and advise on proper disposition.
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(b) With respect to Product returns resulting from mishandling
by Infinity Resources, including, but not limited to, incorrect address
inputting, Products shipped erroneously to Customers or the shipment of Products
known by Infinity Resources to be Unmerchandisable Products prior to shipment by
Infinity Resources (collectively, the "Mishandled Products"), Infinity Resources
shall promptly reship the correct order to Customers at no additional Services
cost to ▇▇▇▇▇▇▇.▇▇▇. As used in this Section 4.1(b), knowledge as to any person
shall include without limitation such person's observation with the naked eye
that the product was an Unmerchandisable Product.
(c) ▇▇▇▇▇▇▇.▇▇▇ will be issued a credit by Infinity Resources
for the price paid by ▇▇▇▇▇▇▇.▇▇▇ for Services for any returned Products that
are not reshipped pursuant to Section 4(b).
(d) ▇▇▇▇▇▇▇.▇▇▇ shall reimburse Infinity Resources for any
freight costs incurred for returned Products, except that Infinity Resources
shall bear freight expenses for returns of Mishandled Products to Infinity
Resources by Customers.
4.2 Infinity Resources will use commercially reasonable efforts and
standards to ensure that Unmerchandisable Products are not shipped to Customers,
and will package Products for shipment to Customers in a manner which is
commercially reasonable to prevent damage during shipment.
4.3 Infinity Resources will insure shipments of Products with an
aggregate value in excess of $250.00. The costs of such insurance will be billed
to ▇▇▇▇▇▇▇.▇▇▇ at Infinity Resources' actual cost of acquiring such insurance
and Infinity Resources shall provide ▇▇▇▇▇▇▇.▇▇▇ with a monthly report detailing
the costs for such insurance. ▇▇▇▇▇▇▇.▇▇▇ reserves the right to adjust the
threshold amount for insurance coverage at any time upon thirty (30) days'
notice to Infinity Resources.
5. Pricing and Payment Terms.
5.1 Services will be charged on either a per order basis ("Per Order
Services") or an annual basis ("Annual Services") as specified on Exhibit D.
5.2 ▇▇▇▇▇▇▇.▇▇▇ shall be responsible for collection of all payments
for sales of Products and for the determination and payment of all applicable
taxes, including sales taxes.
5.3 For Per Order Services, Infinity Resources shall invoice
▇▇▇▇▇▇▇.▇▇▇ as soon as possible but in no event later than ten (10) days after
the end of each month for Per Order Services rendered in the preceding month.
For Annual Services, Infinity Resources shall invoice ▇▇▇▇▇▇▇.▇▇▇ within ten
(10) days after the end of each month an amount equal to one-twelfth (1/12th) of
the annual amount specified on Exhibit D for such Annual Services, which will be
deemed to be Infinity Resources' compensation for Annual Services rendered in
the preceding month. All invoices for Per Order Services and Annual Services
shall be paid by ▇▇▇▇▇▇▇.▇▇▇ no later than the thirtieth (30th) day of the month
in which the invoice is received by ▇▇▇▇▇▇▇.▇▇▇. ▇▇▇▇▇▇▇.▇▇▇ agrees to pay a
late payment charge of one percent (1%) per month on all invoice amounts unpaid
after the due date.
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6. Term and Termination.
6.1 Term. The term of this Agreement shall begin on the Effective
Date and shall continue until December 31, 2004 (the "Initial Term") or until it
is terminated in accordance with this Section 6.
6.2 Termination by Infinity Resources. Infinity Resources shall have
the right (but not the obligation) to immediately terminate this Agreement on or
after the occurrence of any of the following:
(a) ▇▇▇▇▇▇▇.▇▇▇ is in material breach of any of its
obligations or representations hereunder, which breach is not cured within
thirty (30) days of receipt of written notice from Infinity Resources of such
breach; or
(b) ▇▇▇▇▇▇▇.▇▇▇ (i) becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, and such
petition or proceeding is not dismissed within sixty (60) days of filing, or
(ii) becomes the subject of any involuntary petition in bankruptcy or any
involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, and such petition or proceeding is not
dismissed within sixty (60) days of filing.
6.3 Termination by ▇▇▇▇▇▇▇.▇▇▇. ▇▇▇▇▇▇▇.▇▇▇ shall have the right
(but not the obligation) to immediately terminate this Agreement on or after the
occurrence of any of the following:
(a) Infinity Resources is in material breach of any of its
obligations or representations hereunder, which breach is not cured within
thirty (30) days of receipt of written notice from ▇▇▇▇▇▇▇.▇▇▇ of such breach;
(b) Infinity Resources (i) becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, and such
petition or proceeding is not dismissed within sixty (60) days of filing, or
(ii) becomes the subject of any involuntary petition in bankruptcy or any
involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, and such petition or proceeding is not
dismissed within sixty (60) days of filing; or
(c) ▇▇▇▇▇▇▇.▇▇▇'s request to terminate the Services in
accordance with Section 3.5(b).
6.4 Renewal. At the end of the Initial Term, or any Renewal Term (as
defined below) then in effect, this Agreement will be renewed for a further term
of one (1) year (each, a "Renewal Term") if (i) ▇▇▇▇▇▇▇.▇▇▇ delivers to Infinity
Resources a written notice of renewal not later than ten (10) Business Days
before the end of the Initial Term or such then-effective Renewal Term, as the
case may be, and (ii) Infinity Resources does not deliver to ▇▇▇▇▇▇▇.▇▇▇ a
written notice of its election not to renew this Agreement prior to the
expiration of the Initial Term or such then-effective Renewal Term, as the case
may be (the Initial Term
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together with any Renewal Terms, the "Term").
6.5 Notice of Termination. A party may exercise its right to
terminate pursuant to this Section 6 by sending appropriate written notice to
the other party as provided in Section 13.2 hereof. No exercise by a party of
its rights under this Section 6 will limit any other remedies available to such
party or such party's rights to exercise any other rights under this Section 6.
6.6 Effect of Termination.
(a) Infinity Resources shall fulfill all orders placed prior
to the effective date of termination but shall have no responsibility to provide
any further Services to ▇▇▇▇▇▇▇.▇▇▇ as of the effective date of termination.
(b) Except as set forth in Section 6.6(a), Infinity Resources
shall promptly return all of ▇▇▇▇▇▇▇.▇▇▇'s equipment and property following the
effective date of termination. Such transfer shall be at ▇▇▇▇▇▇▇.▇▇▇'s expense
except in the case of termination by ▇▇▇▇▇▇▇.▇▇▇ for breach under Section
6.3(a).
7. Confidentiality.
7.1 Confidential Information. Each party shall cause each of its
Affiliates and each of their officers, directors and employees to hold all
information (the "Confidential Information") relating to the business of the
other party disclosed to it by reason of this Agreement confidential and will
not disclose any of such Confidential Information to any third party, except as
provided in this Agreement. Each party shall limit disclosure of such
Confidential Information to those of its employees who have a need to know such
Confidential Information and shall inform those employees to whom such
disclosure is made of their obligations of confidentiality and limited use. The
obligations of this Section 7 shall not extend to any Confidential Information:
(a) that, on or after the date of this Agreement, comes into
the public domain through no fault of a party with a confidentiality obligation
under this Agreement;
(b) that is disclosed to a party with a confidentiality
obligation under this Agreement, without restriction on disclosure, by a third
party who has the lawful right to make such disclosure; or
(c) that is required to be disclosed by a party by law, or to
a court or by a Governmental Body (as defined in the Asset Purchase Agreement).
7.2 Customer Data. As between Infinity Resources and ▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇▇▇.▇▇▇ owns all right, title and interest in the Customer Data with no duty
to account to Infinity Resources. Customer Data shall be deemed to be the
Confidential Information of ▇▇▇▇▇▇▇.▇▇▇. Infinity Resources shall have no right
to use the Customer Data except solely as necessary to perform its obligations
to ▇▇▇▇▇▇▇.▇▇▇ hereunder. Infinity Resources agrees that any use of Customer
Data hereunder shall conform with ▇▇▇▇▇▇▇.▇▇▇'s privacy policy, as such policy
may be revised from time to time at ▇▇▇▇▇▇▇.▇▇▇'s sole discretion, and that
Infinity
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Resources shall not knowingly violate privacy and data protection laws,
regulations, and policies applicable to the gathering, processing, storing and
transmitting of such Customer Data. Without limiting the foregoing, Infinity
Resources will not use the Customer Data for the purpose of sending or causing
to be sent to any Customer any uninvited solicitation in any form of media now
known or hereafter developed. The parties acknowledge that they share some
common customers and Infinity Resources shall not be restricted from contacting
any customer whose information it acquires independently from its access to the
Customer Data.
8. No Ownership; Liens.
8.1 Except as agreed between the parties, in writing, or as
expressly set forth in this Agreement or the other Transactions Documents,
Infinity Resources shall have no right, title or interest in or to any equipment
or property provided by ▇▇▇▇▇▇▇.▇▇▇ for use by Infinity Resources in relation to
any Service provided hereunder.
8.2 Except as required to perform its obligations hereunder, neither
party is hereby granted any rights in or to the other party's trademarks,
service marks, trade names, service names or other marks, registered or
otherwise (collectively, the "Marks"). All use by one party of the other party's
Marks shall conform to the usage guidelines provided by the party owning the
Marks, which guidelines may be updated from time to time. In the event that a
party notifies the other party of any incorrect usage of its Marks, the notified
party shall promptly correct such usage. All use of a party's Marks by the other
party shall inure to the benefit of the party owning the Marks and such owning
party shall be the sole party entitled to register its Marks.
8.3 Nothing in this Agreement shall be deemed to alter or amend any
existing agreement between any of the parties and any third party.
8.4 During the Term of this Agreement, Infinity Resources shall not
allow liens or encumbrances of any kind to be placed on any of the Products or
any additional property of ▇▇▇▇▇▇▇.▇▇▇ in the possession of Infinity Resources
or located at the Warehouse Facilities other than by ▇▇▇▇▇▇▇.▇▇▇.
9. Indemnification. Except as otherwise provided herein, neither party
shall have any liability whatsoever to the other party for any error, act or
omission in connection with the Services unless such error, act or omission
derives from willful misconduct or gross negligence. In no event shall either
party hereto be entitled to make a claim against the other party for lost
profits, use, production or contract or other consequential, incidental,
indirect, special or punitive damages or for any financial or economic loss
whatever and howsoever caused; provided, however, that in the event of a
Termination For Convenience by ▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇.▇▇▇ shall pay to Infinity
Resources damages equal to a pro-rata amount of $3,314,381. Such pro-rata amount
shall be equal to the product of (a) the number of full months remaining until
the end of the third quarter of 2004 as of the effective date of termination for
convenience and (b) $69,049.60 (which represents the monthly allocation of
$3,314,381 over four (4) years). For purposes of this Section 9, "Termination
For Convenience" shall mean a termination by a going concern ▇▇▇▇▇▇▇.▇▇▇
business for the purpose of selecting an alternate provider of the Services.
Such payment shall be made in monthly installments of $69,049.60 beginning
thirty
9
(30) days after the effective date of termination. For purposes of this
Agreement, such amount shall be deemed to be Infinity Resources' direct damages
for termination by ▇▇▇▇▇▇▇.▇▇▇ for convenience. The liability of either party
for damages or alleged damages hereunder, whether in contract, tort or any other
legal theory, is limited to, and will not exceed, the other party's direct
damages.
10. Relationship of Parties. Each party hereto is an independent
contractor and when its employees act under the terms of this Agreement, they
shall be deemed at all times to be under the supervision and responsibility of
such party; and no person employed by either party and acting under the terms of
this Agreement shall be deemed to be acting as agent or employee of such party
or any customer of such party for any purpose whatsoever. Neither of the parties
shall act or represent or hold itself out as having authority to act as an agent
or partner of the other party, or in any way bind or commit the other party to
any obligations. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture, agency, trust or other association of any
kind, each party being individually responsible only for its obligations as set
forth in this Agreement.
11. Audit Rights.
11.1 Books and Records. From and after the date hereof, Infinity
Resources shall maintain accurate and detailed records and accounts of all
transactions relating to the Services (the "Records") performed hereunder, and
shall allow ▇▇▇▇▇▇▇.▇▇▇ or its representatives access to such records upon
reasonable notice and during normal business hours to audit or check the
accuracy of such Records. At the end of the Term, Infinity Resources shall
promptly deliver to ▇▇▇▇▇▇▇.▇▇▇, at ▇▇▇▇▇▇▇.▇▇▇'s expense, copies of any such
Records in the possession of Infinity Resources reasonably requested by
▇▇▇▇▇▇▇.▇▇▇.
11.2 Audit of Products and Inventory Records. In addition to
▇▇▇▇▇▇▇.▇▇▇'s rights to inspect Products upon receipt pursuant to Section
2.2(b), ▇▇▇▇▇▇▇.▇▇▇ may inspect Products after receipt and examine Infinity
Resources' records pertaining to inventory under this Agreement during normal
business hours and upon no less than a two (2) Business Days' notice to Infinity
Resources.
12. Force Majeure. Infinity Resources shall be temporarily excused from
providing the Services during the period of an applicable Force Majeure event.
13. Miscellaneous.
13.1 Definitions. As used in this Agreement, the following terms
have the following meanings. Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings ascribed to them in the Asset Purchase
Agreement.
"Affiliate" means any Person who is an "affiliate" as defined in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, and the rules and regulations promulgated thereunder.
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"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in the State of Illinois are authorized or required by
law or executive order to close. For purposes of this Agreement, ▇▇▇▇▇▇▇.▇▇▇'s
Business Day ends at 6:00 PM (Central Time).
"CPI" means the Consumer Price Index - All Urban Consumers (all items) for
the United States as published by the U.S. Department of Labor, Bureau of Labor
Statistics.
"Customer Data" means any information provided by, or concerning, any
customer of ▇▇▇▇▇▇▇.▇▇▇.
"Direct Commerce" means the sale and promotion of branded products and
services via mail and other direct marketing efforts.
"Direct Commerce Orders" means orders received from Customers of
▇▇▇▇▇▇▇.▇▇▇'s Direct Commerce business.
"E-Commerce" means conducting any of the following using or via
communications involving the TCP/IP Protocol or any TCP/IP Successors: (i)
promoting, offering, providing or selling goods, (ii) promoting, offering,
providing or selling services including, but not limited to, auctions,
electronic payments, travel and other ticket sales, classified ads, Internet
service provider services, pay-per-view or pay-per-use services, gambling and
gaming, and on-line community services (which include, but are not limited to,
e-mail, chat, bulletin boards, directories, databases, and personal or shared
calendar or address books), or (iii) providing hypertext links to Web sites that
provide any of the foregoing.
"E-Commerce Orders" means orders received from Customers of ▇▇▇▇▇▇▇.▇▇▇'s
E-Commerce business.
"High Risk Products" means Products designated by ▇▇▇▇▇▇▇.▇▇▇ as delicate,
expensive or susceptible to theft.
"Force Majeure" means any cause or condition beyond Infinity Resources'
reasonable control, including, without limitation, to acts of God or of the
public enemy; acts of any federal, state or local government or agency; fires;
floods; epidemics; quarantine restrictions; strikes and labor disputes; war;
negligence or other fault of ▇▇▇▇▇▇▇.▇▇▇ (provided that ▇▇▇▇▇▇▇.▇▇▇ must be
given the opportunity to cure any such negligence or other fault within a
reasonable time); failure of communications capabilities; earthquakes or general
unavailability of energy or materials.
"Order Management System" means Infinity Resources' current inventory and
customer order system or any successor system.
"PEI" means Playboy Enterprises, Inc., a Delaware corporation, and any
successor to such entity.
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"Person" means any individual, corporation, partnership, firm, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Purchase Order System" means Infinity Resources' current purchase order,
receiving American System Inc., or any successor system.
"Services" means all services provided by Infinity Resources hereunder.
"Substantially" means in respect of a given Service, ninety-seven percent
(97%) of the respective Service Performance Level set forth on Exhibit C.
"Unmerchandisable Products" means Products that are shopworn and/or
soiled.
"Warehouse Facilities" means one (1) or more of Infinity Resources'
warehouse facilities as Infinity Resources may from time to time designate.
13.2 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or overnight courier,
postage prepaid. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission, if delivered by commercial
overnight courier service, one (1) day after delivery or, if mailed, five (5)
days after the date of deposit in the United States mails, as follows:
(i) if to Infinity Resources, to:
Infinity Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ III, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12
(ii) if to ▇▇▇▇▇▇▇.▇▇▇, to:
Playboy Enterprises, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AND
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may by notice given in accordance with this Section to the other
parties designate another address or Person (as defined in the Asset Purchase
Agreement) for receipt of notices hereunder.
13.3 Entire Agreement. This Agreement (including the Exhibits)
contains the entire agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements, written or oral, with
respect thereto.
13.4 Waivers and Amendments; Non-Contractual Remedies. This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the parties
hereto or, in the case of a waiver, by the party waiving compliance. No delay on
the part of either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of either
party of any such right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further exercise thereof or
the exercise of any other such right, power or privilege.
13.5 Binding Effect; Assignment. This Agreement shall be binding
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upon and inure to the benefit of the parties and their respective successors and
legal representatives. This Agreement is not assignable except by operation of
law, except that ▇▇▇▇▇▇▇.▇▇▇ may assign this Agreement to any of its Affiliates
or to any successor to all or substantially all of its business or assets.
13.6 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto. The parties hereto confirm that any facsimile copy of another party's
executed counterpart of this Agreement (or the signature page thereof) shall be
deemed to be an executed original thereof.
13.7 Exhibits. The Exhibits are a part of this Agreement as if fully
set forth herein. All references herein to Sections and Exhibits shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.
13.8 Headings. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
13.9 Interpretation. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in the masculine, the feminine
or neuter gender shall include the masculine, the feminine and the neuter.
13.10 Certain Acknowledgments. Each of the parties hereto
acknowledge that it has been represented by legal counsel of its own choice
throughout all negotiations and preparation and review of this Agreement, and
that it has executed this Agreement voluntarily. Each of the parties hereto
acknowledge that it is sophisticated in transactions of the type contemplated by
this Agreement and each party wishes to create a relationship based on the terms
set forth in this Agreement.
13.11 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the parties hereto directs that such court interpret and
apply the remainder of this Agreement in the manner that it determines most
closely effectuates their intent in entering into this Agreement, and in doing
so particularly take into account the relative importance of the term,
provision, covenant or restriction being held invalid, void or unenforceable.
13.12 Survival. The provisions of Sections 6.6 (Effect of
Termination), 7 (Confidentiality), 9 (Indemnification), 13.12 (Survival) and
13.13 (Governing Law) hereof shall survive any termination of this Agreement.
13.13 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Illinois applicable to agreements
made and to be performed entirely within such State.
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IN WITNESS WHEREOF, the parties have executed this Fulfillment and
Customer Service Services Agreement on the date first above written.
INFINITY RESOURCES, INC.
By: s/▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
▇▇▇▇▇▇▇.▇▇▇, INC.
By: s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
15
