FORM OF CUSTOMER SERVICE AGREEMENT
This Customer Service Agreement (this "Agreement") is being entered into
as of the ___ day of __________, 1999 and is entered into by and between xXXxX*s
Inc., a Delaware corporation ("xXXxX*s"), and iTurf Inc., a Delaware corporation
("iTurf").
RECITALS
A. iTurf is currently a wholly-owned subsidiary of xXXxX*s;
B. iTurf is considering an initial public offering of its common stock
("IPO");
C. After the IPO, xXXxX*s desires to obtain certain customer service
services from iTurf, and iTurf desires to provide such services
following the closing date of the IPO.
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
Section 1. Customer Service Provided.
iTurf or, at its option, its subsidiaries shall render to xXXxX*s
the following services ("Services") in accordance with the terms of this
Agreement:
(a) Scope of Service. iTurf shall provide, directly or through its
subsidiaries, E-mail based customer service activities to xXXxX*s solely in
respect of xXXxX*s catalogs, the trademark of which is licensed to iTurf under
the Trademark License and Customer List Agreement between the parties hereto.
Such Services shall include online order tracking and other routine online
customer service functions.
(b) Quality of Services. The quality of Services to be provided by
iTurf hereunder shall be at least equal to the quality of the same services
provided to xXXxX*s by iTurf prior to the effectiveness of this Agreement.
(c) Change in Services Required. In the event that xXXxX*s requires
services that exceed the scope or extent of the Services provided for herein,
and if iTurf agrees to provide such services, iTurf and xXXxX*s shall negotiate
in good faith the terms and conditions, including price, under which iTurf shall
provide such services;
Section 2. Consideration and Compensation.
xXXxX*s shall pay to iTurf when due a fee for the Services equal to
105% of iTurf's cost, provided that in the event this Agreement is terminated in
accordance with Section 3
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hereof, the fee for such Service shall no longer be payable following the
effective date of such termination. Late payments shall accrue interest at a
rate equal to the prime rate announced from time to time by First Union National
Bank plus 300 basis points.
Section 3. Term.
(a) The term of this Agreement shall begin on the date of the closing of
the IPO (the "Effective Date") and shall continue for an indefinite period in
full force and effect until it is terminated in accordance with this Section 3.
(b) iTurf shall have the right (but not the obligation) to terminate
immediately this Agreement:
(i) if xXXxX*s is in material breach of any of its obligations or
representations hereunder, which breach is not cured within
(twenty) 20 days of receipt of written notice from iTurf of
such breach,
(ii) xXXxX*s is the subject of a voluntary petition in bankruptcy
or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed
within sixty (60) days of filing or 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, if such petition
or proceeding is not dismissed within sixty (60) days of
filing,
(iii) if the business of xXXxX*s is liquidated or otherwise
terminated for insolvency or any other basis, or
(iv) if xXXxX*s becomes insolvent or unable to pay its debts as
they mature or makes an assignment for the benefit of its
creditors.
(c) xXXxX*s shall have the right (but not the obligation) to terminate
immediately this Agreement:
(i) if iTurf is in material breach of any of its obligations or
representations hereunder, which breach is not cured within
(twenty) 20 days of receipt of written notice from xXXxX*s of
such breach,
(ii) iTurf is the subject of a voluntary petition in bankruptcy or
any voluntary proceeding relating to insolvency, receivership,
liquidation, or composition for the benefit of creditors, if
such petition or proceeding is not dismissed within sixty (60)
days of filing, or becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating
to insolvency, receivership, liquidation, or composition for
the
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benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing,
(iii) if the business of iTurf is liquidated or otherwise terminated
for insolvency or any other basis, or
(iv) if iTurf becomes insolvent or unable to pay its debts as they
mature or makes an assignment for the benefit of its
creditors.
(d) xXXxX*s may terminate this Agreement at any time on (sixty) 60 days'
notice to iTurf.
Section 4. Payment; Records and Accounts.
(a) iTurf shall invoice xXXxX*s within (forty-five) 45 days of the end of
each fiscal quarter for Services rendered in such fiscal quarter. xXXxX*s shall
pay such invoice within (thirty) 30 days of receipt.
(b) iTurf shall maintain accurate books, records and accounts of all
transactions relating to the Services performed by it pursuant to this
Agreement. xXXxX*s may, at its own expense, examine and copy those books and
records as provided in this Section 4. Such books, records and accounts shall be
maintained separately from iTurf's own records and accounts and shall reflect
such information as would normally be examined by an independent accountant in
performing an audit pursuant to United States generally accepted auditing
standards for the purpose of certifying financial statements, and to permit
verification thereof by governmental agencies. xXXxX*s may make those
examinations only during iTurf's usual business hours, and at the place where it
keeps the books and records. xXXxX*s will be required to notify iTurf at least
ten (10) days before the date of planned examination. If xXXxX*s examination is
not completed within two months from commencement, iTurf may require xXXxX*s to
terminate it on seven (7) days' notice to xXXxX*s at any time, provided that
iTurf has cooperated with xXXxX*s in the examination of such books and records.
Section 5. Independent Contractor.
iTurf is an independent contractor and when its employees act under
the terms of this Agreement, they shall be deemed at al times to be under the
supervision and responsibility of iTurf; and no person employed by iTurf and
acting under the terms of this Agreement shall be deemed to be acting as agent
or employee of xXXxX*s or any customer of xXXxX*s for any purpose whatsoever.
Section 6. Confidentiality.
iTurf agrees to hold in strict confidence, and to use reasonable efforts
to cause its employees and representatives to hold in strict confidence, all
confidential information concerning xXXxX*s furnished to or obtained by iTurf in
the course of providing the Services
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except to the extent that (a) such information has been in the public domain
through no fault of iTurf (b) disclosure or release is compelled by judicial or
administrative process, or (c) in the opinion of counsel to iTurf, disclosure or
release is necessary pursuant to requirements of law or the requirements of any
governmental entity including, without limitation, disclosure requirements under
the Securities Exchange Act of 1934, as amended.
Section 7. Miscellaneous.
(a) Neither party may assign this Agreement, or their respective
rights and obligations hereunder, in whole or in part without the other party's
prior written consent. Any attempt to assign this Agreement without such consent
shall be void and of no effect ab initio. Notwithstanding the foregoing, either
party may assign this Agreement or any of its rights and obligations hereunder
to any entity controlled by it or to any entity that acquires it by purchase of
stock or by merger or otherwise, or by obtaining substantially all of its assets
(a "Permitted Assignee"), provided that any such Permitted Assignee, or any
division thereof, thereafter succeeds to all of the rights and is subject to all
of the obligations of iTurf under this Agreement.
(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State. Each party shall comply in all respects with
all laws and regulations applicable to its activities under this Agreement.
(c) Each party hereto irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
or (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby or thereby. Each of xXXxX*s and
iTurf agrees to commence any such action, suit or proceeding either in the
United States District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of xXXxX*s and iTurf further agrees that service of any process,
summons, notice or documents by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any maters to which it has
submitted to jurisdiction in this Section 9(c). Each of xXXxX*s and iTurf
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby and thereby in (i) the Supreme Court of the State of New
York, New York County, or (ii) the United States District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(d) If any provision of this Agreement (or any portion thereof) or
the application of any such provision (or any portion thereof) to any person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such
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invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
(e) All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(i) if to iTurf,
iTurf Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
(ii) if to xXXxX*s,
xXXxX*s, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
(f) The provisions of Section 7 hereof shall survive any termination
of this Agreement.
(g) The parties to this Agreement are independent contractors. There
is no relationship of partnership, joint venture, employment, franchise, or
agency between the parties. Neither party shall have the power to bind the other
or incur obligations on the other's behalf without the other's prior written
consent.
(h) No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of such right.
(i) This Agreement, along with the Exhibits hereto, contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
(j) This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.
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(k) This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto; provided, however, that
as long as xXXxX*s has direct or beneficial ownership of 30% or more of the
voting power represented by the voting securities of iTurf and no other person
directly or beneficially owns a greater percentage of such voting power, no
amendment of a material term or waiver of a material obligation of this
Agreement shall be valid unless it has been approved by a majority of the
members of the board of directors of iTurf who are not directors or officers of
xXXxX*s or the beneficial owners of five percent or more of the outstanding
voting securities of xXXxX*s.
(l) This Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto any legal or equitable rights hereunder.
(m) The headings contained in this Agreement hereto are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO CUSTOMER SERVICE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
xXXxX*s Inc.
By:____________________________________________
Name:
Title:
iTurf Inc.
By:____________________________________________
Name:
Title:
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