MASTER SERVICES AGREEMENT
Exhibit
10.20
This
Master Services Agreement (this“Agreement”),
dated as of November __, 2006 (“Effective Date”), is
by
and
between Accretive
Commerce, Inc.,
a
Delaware corporation with a principal place of business at 00000
Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000 (“Accretive Commerce”)
and
Valcent Products, Inc. (“Company”),
a ___________________with a principal place of business at 0000 Xxxxxxxx Xxxx
Xxxxxx
Xxxxx
X,
Xx Xxxx, XX 00000.
RECITALS
WHEREAS,
Company
has a variety of marketing programs for the sale and/or distribution of various
merchandise and a variety of promotional campaigns to enhance such marketing
programs; and
WHEREAS,
Accretive Commerce is a provider of various services to the direct response
industry, including, but not limited to:
order
entry; data processing; rebate processing;
sweepstakes processing;
inbound
telemarketing; customer service; pick, pack and ship; order fulfillment;
warehousing and storage; and returns processing; and
WHEREAS,
Accretive
Commerce desires to provide some or all of such
services
to
Company,
as more
particularly described herein; and
WHEREAS,
Company
desires that Accretive Commerce provide certain
services
in connection with the sale of certain merchandise or processing for certain
promotional
campaigns,
and
Accretive Commerce desires to provide such services to Company.
STATEMENT
OF AGREEMENT
NOW,
THEREFORE,
in
consideration of the mutual promises and conditions contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
For the
purposes of this Agreement, the following definitions shall apply:
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a.
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“Business
Day” shall mean any day other than (i) a Saturday or Sunday or (ii)
a
day when the Federal Reserve Bank of New York is not open (currently
New
Year’s Day, Birthday of Xxxxxx Xxxxxx Xxxx, Xx., Washington’s Birthday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans
Day,
Thanksgiving Day, and Christmas
Day).
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b.
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“Close-Down
Expense” shall mean charges from Accretive Commerce to Company relating to
all activities necessary to remove Merchandise
from Accretive Commerce facilities, for purging the Accretive Commerce
computer system of Data
and for such other activities as shall be agreed upon between Accretive
Commerce and Company,
including, without limitation,
removal of Merchandise from racks, packing Merchandise
for
shipment (if necessary), preparing freight documents for shipment
of
Merchandise to
Company’s designated destination and loading Merchandise
on
the trucks of Company’s designated carrier, together with the cost of any
necessary supplies
(collectively, the “Close-Down Services”).
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c.
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“Count
Date” shall mean the dates, established by the parties under the terms
of
this Agreement, for executing
a cycle count of physical
inventory.
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d.
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“Data”
shall mean the Company data being stored by Accretive Commerce in
or on
the Process with respect to the provision of Services under this
Agreement.
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1
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e.
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“Grace
Period” shall mean a period commencing on the Effective
Date
and terminating 60 days thereafter, wherein the Company transitions
onto
the Process and into the facility where the Services will be
performed.
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f.
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“Hazardous
Substance” shall mean any substance or material defined or designated as
hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic
or radioactive substance or other similar term by any federal, state
or
local environmental law, regulation or rule presently in effect or
promulgated in the future,
as
such laws, regulations, or rules may be amended from time to time.
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g.
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“Imprest
Fund” shall mean a segregated fund maintained by Accretive Commerce to
pay
certain expenses on behalf of Company, including all common carrier
and
other delivery service shipping costs, packing material
costs,
stationery expenses
and
other similar expenses, as specified in an applicable Statement of
Work.
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h.
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“Initial
Start-Up Fee”
shall mean the fee for Start-Up
Services, as specified in an applicable Statement of
Work.
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i.
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“Inventory
Shrinkage” shall mean the sum of Merchandise Inventory Shrinkage and
Non-Merchandise Inventory
Shrinkage.
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j.
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“Inventory
Variance” shall mean the difference between the value of the inventory as
determined from the perpetual inventory report on any Count Date
and the
value of the inventory established by a cycle count or physical inventory
on the date the inventory was received by Accretive Commerce or the
previous Count Date; provided, however, that for purposes of determining
the Inventory Variance, prices shall be deemed to be constant regardless
of any intermittent price changes. The value of any adjustment made
at any
time to the perpetual inventory report shall be added to or subtracted
from, as the case may be, the Inventory Variance for the purpose
of
calculating Merchandise and Non-Merchandise Inventory
Shrinkage.
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k.
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“Merchandise”
shall mean products offered for sale or distribution by Company.
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l.
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“Merchandise
Inventory Shrinkage” shall mean the quotient that
results from dividing (i) Inventory Variance by (ii) the total Merchandise
inventory receipts processed by Accretive Commerce during the prior
12
months.
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m.
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“Non-Merchandise”
shall mean paper products or other materials utilized in the Process,
but
that
are not offered for sale by the Company, including but not limited
to
marketing inserts, dunnage, customized packing slips, and customized
corrugate.
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n.
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“Non-Merchandise
Inventory Shrinkage” shall mean the quotient that
results from dividing (i) Inventory Variance by (ii) the total
Non-Merchandise inventory receipts processed by Accretive Commerce
during
the prior 12 months
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o.
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“Problem
Merchandise” shall mean Merchandise shipped to Accretive Commerce, which
in Accretive Commerce’s
sole
discretion, cannot be processed by Accretive Commerce without imposing
an
unreasonable hardship on Accretive Commerce. For illustrative purposes
and
without limiting the definition thereof, Problem Merchandise shall
include
all Merchandise that (i) arrives with insufficient paperwork, (ii)
is
delivered to Accretive Commerce in the absence of a delivery appointment
or (iii) is faulty or damaged
when delivered.
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p.
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“Problem
Merchandise Rate” shall mean a storage rate of one and one-half times the
applicable storage rate in an applicable Statement
of Work.
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q.
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“Process”
shall mean,
collectively,
all computer software, systems, databases, inventions, ideas, trade
secrets, methods of operation, other computer-related material and
all
procedures and processes used by Accretive Commerce in connection
with the
performance of its obligations under this Agreement (including but
not
limited to those developed by Accretive Commerce and modifications
or new
programs developed by Accretive Commerce for Company).
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2
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r.
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“Quarterly
Forecast” shall mean a complete set of projections covering the operation
of the Company’s business
for the next succeeding two calendar quarters, including, by week,
reasonably
anticipated forecasts as to (i)
number of orders,
(ii)
number of emails and telephone calls,
(iii)
number of units received and shipped and
(iv)
returns.
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s.
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“Revised
Quarterly Forecast” shall mean any revision to a Quarterly Forecast or a
previously
delivered
Revised Quarterly Forecast.
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t.
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“Service
Levels” shall mean certain mutually agreed upon standards of performance
as set forth in an
applicable
Statement of Work, which Accretive Commerce shall maintain in the
rendering of the Services so long as Company is not in default hereunder.
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u.
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“Services”
shall mean the services
provided by
Accretive Commerce hereunder,
as
further specified in an applicable Statement of
Work.
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v.
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“Special
Services” shall mean Services not specified in any Statement of Work,
requested by Company.
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w.
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“Start-Up
Services” shall mean those start-up Services so identified in an
applicable Statement of Work.
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x.
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“Statement
of Work” or “SOW” shall mean a document issued under this Agreement
and
incorporated in its entirety herein, which sets
forth, without limitation, a description of services, rates and
fees
for Services to be performed hereunder.
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y.
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“Term”
shall mean the Initial Term and all renewal terms,
collectively.
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z.
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“Transaction
Fees” shall mean a fee due to Accretive Commerce for the provision of
Transaction Services.
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aa.
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“Transaction
Rate” shall mean the amount of a specific fee due to Accretive Commerce
for the provision of a specific Transaction
Service.
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bb.
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“Transaction
Services” shall mean Services billed to Company on a “per unit” basis, as
specified in an applicable Statement of
Work.
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2. APPOINTMENT.
Company
hereby appoints Accretive Commerce as a third party provider of the
Services
for the Nova
Skin Care System line
of
products sold through direct response advertising upon the terms and conditions
set forth in this Agreement.
3. SERVICES.
Company
hereby engages Accretive Commerce to provide such Services as are described
in
the attached Statement of Work or future Statements of Work to be entered into
between the parties, and Company shall pay for such Services as set forth
herein
and therein.
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a.
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Except
as otherwise expressly permitted under this Agreement, all instruments,
such as orders, acknowledgments, invoices, schedules, attachments,
exhibits
and the like used in conjunction with this Agreement (“Instruments”) shall
be for the sole purpose of defining quantities, prices, and describing
services or products to be provided hereunder, and to this extent
only are
incorporated as a part of this
Agreement.
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b.
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Any
modifications to a Statement of Work shall require execution of a
written
change order agreed to and executed by both parties to this
Agreement.
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c.
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Accretive
Commerce shall not be precluded from out-sourcing certain Services
on a
temporary basis,
provided there is prior written consent of Company.
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d.
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Accretive
Commerce further promises to deliver or facilitate the following
and as
further set forth in the Statement of
Work:
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3
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i.
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Status
Calls will be held every week initially during start-up, and at least
every other week after start-up, to discuss the program, how it is
running, and any issues that may
arise.
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ii.
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Customer
Service requests from Valcent
Products, Inc.
will be responded to within 8 hours.
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iii.
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Typical
order shipments will be handled within 24 hours of the order being
received by Accretive Commerce (except holidays and weekends). Exceptions
for credit card declines, and backordered product are acceptable.
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iv.
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When
applicable, continuity orders need to be shipped to consumers so
that they
arrive at the consumers home within 3 days on either side of their
requested re-order timing.
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4. SERVICE
LEVELS.
In
the
event the parties agree to subject certain Services to mutually agreed upon
Service Levels, such Service Levels shall be set forth in the applicable
Statement of Work, provided that Service Level
requirements
shall
not apply during the Grace Period. In circumstances where a Statement of Work
does not stipulate Service
Levels,
Accretive Commerce shall use commercially reasonable efforts to provide
Service
Levels consistent with
the
industry norm for such Services.
5. FEES
AND CHARGES.
In
consideration for performance of the Services during the Term,
Company
shall pay to Accretive Commerce the fees and charges delineated in the
applicable Statement of Work. These fees and charges shall include:
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a.
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Initial
Start-Up Fee. Company shall pay Accretive Commerce an Initial
Start-Up
Fee as consideration for the Start-Up
Services agreed upon by the parties hereto,
as
set forth in the Statement of Work.
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| b. |
Transaction
Fees and Rates.
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| i. |
Company
shall pay to Accretive Commerce Transaction Fees,
as
set forth in the Statement of Work.
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c.
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Administrative
Fees. Company shall pay Administrative Fees to Accretive Commerce
for
account management services as
specified in an applicable Statement
of Work
upon approval of Company.
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d.
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Special
Services. If Company requests that Accretive Commerce provide services
not
already defined in the Statement of Work, Company shall pay Accretive
Commerce at the hourly rates specified in the applicable Statement
of Work
or
a fixed amount mutually agreed to in writing by the parties. All
requests
for
Special Services
shall be in writing and signed by both
parties.
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e.
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Close-Down
Expenses. Upon expiration or any termination of this Agreement for
any
reason, Accretive
Commerce shall perform the Close-Down Services, and Company
shall pay the
Close-Down
Expenses based on the hourly rates set forth in the applicable Statement
of Work (subject to any applicable CPI Adjustment). Accretive Commerce
shall provide Company of estimate of such Close-Down Expenses
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6. PAYMENT
PROCEDURE.
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a.
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Initial
Start-Up Fee. Company shall pay the Initial
Start-Up Fee,
if any, concurrently with the execution of this Agreement
and
any subsequent Statement
of Work that
requires a separate start-up fee.
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b.
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Invoices.
Accretive Commerce will xxxx Company for these services at rates
listed in
the attached Statement of Work.
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| c. |
Payment
Terms.
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| i. |
Payment
terms for Initial Start-Up
Fees, Transaction Fees and Hourly Rates, Minimum Charges, Administrative
Services and Special Services shall be net 30 days from the date
of
invoice. Company shall make payments
by:
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1.
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USPS
Certified First Class mail to: XX Xxx 00000, Xxxx xx Xxxxxxxx, XX
00000-0000 or,
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2.
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electronically
to Accretive Commerce
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| ii. |
Payment
terms for Close-Down Expenses. 100%
of
the estimated Close-Down
Expense,
which Accretive Commerce shall provide to Company, must be paid 30
days
before the expected date on which the
Close-Down Services
will be completed or before any Merchandise is removed from Accretive
Commerce facility as part of the
Close-Down Services,
whichever is earlier. Accretive Commerce shall reconcile such advance
payment against the actual Close-Down
Expenses
and issue Company a final invoice or refund not more than 14 days
after
the completion of the
Close-Down Services.
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d.
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Security
Deposit
Accretive Commerce will invoice client for freight / postage charges
which
must be paid within terms, however, at all times during the term
hereof,
client must maintain on deposit with Accretive Commerce an amount
sufficient to cover third party shipping / freight charges for a
minimum
of one month usage. Accretive Commerce has the right to adjust the
amount
required to be on deposit to reflect volume trends. Accretive Commerce
will not ship orders if the amount of freight / postage exceeds the
amount
in the deposit account. Additionally, in the event that payment for
services exceed agreed upon terms, Accretive Commerce retains the
right,
at its sole discretion, to apply available surplus deposit amounts
against
balance due. Upon termination of this Agreement, or removal of all
client
property, whichever is later, Accretive Commerce shall reimburse
client
all surplus amounts payable to client and retained by Accretive Commerce
within fifteen (15) days of the later
date.
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7. IMPREST
FUND.
At any
time during the term of this Agreement, upon
the
request of Accretive Commerce or at Company’s request with Accretive Commerce’s
approval, Company will
establish and maintain an
Imprest Fund. Company
and Accretive Commerce shall agree in advance upon which costs and charges
are
to be paid from the Imprest Fund, it being understood that such list of charges
may change from time to time according to Company’s business needs and Accretive
Commerce’s operations. Accretive
Commerce shall pay Company costs and charges therefrom (as identified in the
applicable Statement of Work or otherwise mutually agreed)
so long
as and to the extent that a balance remains therein. As
a
minimum, the Imprest Fund shall be funded by Company from time to time as needed
to bring the balance of the Imprest
Fund
to an
amount that would cover forecasted expenses for the ensuing two-week period
after taking into consideration such factors as forecasted order volume,
seasonality and other applicable factors. If the Imprest Fund is insufficient
to
cover such expenses, Accretive Commerce may, in its sole discretion: (a)
pay
the
expenses and immediately invoice Company for the amount of expenses
incurred,
and
such invoice amount shall be payable within five
Business
Days after receipt; or (b) following five
Business
Days after providing Company with written notice of insufficient funds in the
Imprest Fund (and the Imprest Fund has not during such time been restored in
full), elect not to pay the expenses, and if Accretive Commerce so elects not
to
pay the expenses, it shall have no liability whatsoever for any losses or
liabilities incurred by Company for such nonpayment. In addition, if the Imprest
Fund is being used to cover the costs of common carrier and other delivery
service shipping, Accretive Commerce may suspend shipping if the available
funds
are insufficient to pay additional shipping charges. Accretive Commerce shall
provide Company with a weekly statement setting forth the balance of, and
accounting for disbursements from, the Imprest Fund.
8. INVENTORY.
Company
shall, at its own expense, supply Accretive Commerce at the Accretive Commerce
facilities
specified in the applicable Statement of Work, and maintain with Accretive
Commerce, an inventory of Merchandise and
Non-Merchandise materials adequate
to fill orders received for Company’s
Merchandise,
consistent with its Quarterly Forecasts or Revised Quarterly Forecasts.
Accretive Commerce shall use commercially reasonable efforts to preserve and
maintain Merchandise and
Non-Merchandise materials received
from Company in good and marketable condition.
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9. AUDITS
AND MAINTAINING RECORDS. Accretive
Commerce will keep (to the extent it is part of Accretive Commerce’s business
practice), during the term of this Agreement, complete and accurate books
and
records of all contracts, inventories, orders, copy, files, records,
accounts and other documents and matters in Accretive Commerce’s possession or
under its control to the extent they pertain directly to Company or any
Services. Company and its attorneys or regular certified public
accountants, at Company’s expense, will have the right at any time during
regular business hours upon thirty (30) business days prior written notice,
to
audit, examine and make extracts from all such records, including the general
ledger, invoices, and any other records, including inventory levels, which
Company reasonably deems appropriate to verify the accuracy of Accretive
Commerce’s performance under this Agreement, including records of Accretive
Commerce’s affiliates if they are directly involved in activities which are the
subject of this Agreement.
10. SECURITY
INTEREST AND LIENS.
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a.
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Company
acknowledges that Accretive Commerce has a warehousemen’s statutory lien
on the Merchandise, as provided for by the laws of the states
in
which the Merchandise is being
warehoused.
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11. RISK
OF LOSS.
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a.
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All
risk of loss and damage to Merchandise from any cause prior to receipt
by
Accretive Commerce into, and from and after the removal by common
carrier
from, the inventory at the Accretive Commerce Facility shall be borne
by
Company. Any loss or damage by fire or casualty to Merchandise on
the
premises of Accretive Commerce shall be borne by Company and shall
not
be
considered Merchandise Inventory Shrinkage unless such loss or damage
is
due to Accretive Commerce’s negligence, theft or willful misconduct. As
the sole and exclusive remedy to Company
for such loss or damage to the Merchandise inventory,
Accretive Commerce shall reimburse Company at Company’s net Merchandise
cost as specified in an applicable Statement
of Work
for Merchandise Inventory Shrinkage, which calculation shall be made
on
12/31/2007 and once annually on the anniversary date of the first
receipt
by Accretive Commerce or such other date as may be mutually agreed
between
the parties.
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b.
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All
risk of loss and damage to Non-Merchandise
materials
from any cause prior to receipt by Accretive Commerce into, and from
and
after the removal by common carrier from, the inventory at the Accretive
Commerce Facility shall be borne by Company. Any loss or damage by
fire or
casualty to Non-Merchandise materials on the premises of Accretive
Commerce shall be borne by Company
and shall not be considered Non-Merchandise Inventory Shrinkage.
As the
sole and exclusive remedy to Company for any other loss or damage
to
Non-Merchandise inventory,
Accretive Commerce shall reimburse Company at Company’s net cost as
specified in an applicable Statement of Work for Non-Merchandise
Inventory
Shrinkage, which calculation shall be made once annually on the
anniversary date of the first receipt by Accretive Commerce or such
other
date as may be mutually agreed between the parties.
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12. COLLECTIONS.
Notwithstanding anything contained herein to the contrary, the parties
acknowledge that Accretive Commerce shall not be required to make any collection
efforts on Company’s behalf and shall share no risk with respect to any failure
of Company to collect payment for any customer order.
13. TAXES.
All
fees, costs, charges and other amounts payable to Accretive Commerce hereunder
for Services rendered by Accretive Commerce to Company are exclusive of
applicable taxes, if any, which (other than income taxes of Accretive Commerce)
are the responsibility of Company. Accretive
Commerce shall calculate for each customer sale all applicable sales taxes
based
on information supplied by Company. A list of all the jurisdictions in which
Company is required to collect sales taxes shall be included in the Statement
of
Work, which Company shall promptly update as required to keep such information
current during the Term, and Company shall be solely responsible for the
accuracy of such information. Company shall be responsible for the collection
and payment of all sales taxes, the preparation and filing of all sales tax
documentation and the compliance with all sales tax laws. Accretive Commerce
shall have no such responsibilities for payment or collection of any such taxes
unless otherwise required by law. Company shall defend, indemnify and hold
harmless Accretive Commerce, employees, officers, directors, agents, successors
and permitted assigns from and against any and all claims, suits, actions,
debts, liabilities, damages, costs, charges and expenses, including without
limitation, court costs and attorneys’ fees, arising out of or relating to
Company’s failure to properly and timely file and pay applicable
taxes.
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14. MONETARY
DEFAULT.
If
Company is in breach of the terms governing the payment of any fees, charges,
invoices or other amounts due hereunder to Accretive Commerce, Accretive
Commerce shall at its discretion (i) charge a finance charge of one and
one half percent (1.5%) per month of such past due fees, charges, invoices
or
other amounts and (ii) upon five Business Days prior written notice, cease
providing Services and performing its obligations under this Agreement and/or
terminate this Agreement provided that the finance charge set forth in (i)
hereof shall continue on all outstanding balances. In the event Accretive
Commerce incurs any fees or costs (including without limitation, any reasonable
attorneys’ fees) in collecting outstanding balances and enforcing this
Agreement, Company shall be liable for all such fees and costs. If Company
in
good faith disputes any amount billed, Company must report to Accretive
Commerce, in writing prior to the date the payment for the disputed amount
is
due but in no event later than fifteen
Business Days after Company’s receipt of invoice, the reasons for such dispute.
Accretive Commerce and Company agree to work diligently to resolve the dispute
within 15 days after the receipt of such written notice by Accretive Commerce.
Failure to resolve such dispute during such time period shall allow Accretive
Commerce to terminate the Agreement and to seek all available remedies.
15. OTHER
DEFAULTS.
If
either Company or Accretive Commerce believes the other party is in material
breach of any of its non-monetary obligations under this Agreement as a result
of any reason other than Force Majeure, the party believing that such a breach
by the other party has occurred shall, within 30
days of
discovery of such alleged breach, give written notice to the other party
declaring a material breach of this Agreement and specifying the nature of
the
breach. If the alleging party fails to give written notice of an alleged
material breach within 15
days of
its discovery of such alleged breach, such alleging party shall lose any rights
to terminate this Agreement
based
upon the alleged material breach. The breaching party shall have 15
days in
which to cure such breach or, if such breach cannot be completely cured within
15
days, a
reasonable time to cure such breach as long as the breaching party is diligently
pursuing a cure for the breach.
16. FORCE
MAJEURE.
Neither
Accretive Commerce nor Company shall be liable for any delay or failure in
performance under this Agreement, any failure or delay in satisfying any
warranty, representation or obligation contained herein, or interruption of
service resulting, directly or indirectly, from acts of God, civil or military
authority, acts of public enemies, acts of terrorism, war, riot, strikes, labor
disputes, power outage, accidents, fire, explosions, earthquakes, floods, the
elements, acts or omissions of third parties that are not subject to either
party’s control, or any similar cause beyond the reasonable control of such
party (a “Force Majeure”), so long as, following the cessation of such cause,
such party uses its reasonable efforts to resume its performance hereunder.
If
Accretive Commerce is unable to perform the Services due to a Force Majeure,
then Accretive Commerce may out-source Services on a temporary basis pursuant
to
the Section of this Agreement entitled, Services. Force Majeure shall not be
an
excuse for Company not meeting any financial obligation hereunder with respect
to the timely payment for services.
17. TERM
AND TERMINATION.
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a.
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Term.
The term of this Agreement shall commence upon the Effective Date
and
shall continue until every Statement of Work under this Agreement
has
expired or been terminated in accordance with the terms of this Agreement.
For the Statement of Work relating to the Services for the Nova
Skin Care System
line of products sold through direct response advertising, this Agreement
will
be effective on November ____, 2006 will last one (1) year. After
initial
term is complete, Agreement will continue on a month-to-month basis
and
will terminate when Company gives Accretive Commerce thirty (30)
days
written notice.
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b.
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Termination.
In addition to any other remedies available to either party, this
Agreement may be terminated upon the occurrence of any of the following,
provided that any amounts owing to Accretive Commerce through the
date of
termination (including without limitation, any Close-Down Expenses)
shall
be payable to Accretive Commerce notwithstanding any such
termination:
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| i. |
Monetary
Default. Accretive Commerce shall have the termination rights described
in
the Section of this Agreement entitled Monetary
Default.
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| ii. |
Bankruptcy.
Either party may terminate this Agreement, effective immediately
upon
giving written notice if the other party files a petition in bankruptcy
or
files for a reorganization or for the appointment of a receiver or
trustee
of all or substantially all of such party’s property, or makes an
assignment or petitions for or enters into an arrangement for the
benefit
of creditors, or if a petition in bankruptcy is filed against the
other
party which is not discharged within 60
days thereafter.
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7
| iii. |
Non-Monetary
Default. A material default by either party pursuant to the Section
entitled Other Defaults under this Agreement, which is not cured
within
the time periods stated therein, shall entitle the non-breaching
party to
terminate the Agreement upon written
notice.
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18. REPRESENTATIONS
AND WARRANTIES.
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a.
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Accretive
Commerce and Company. Accretive Commerce and Company each hereby
individually represent and warrant that:
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| i. |
Its
execution, delivery and performance of this Agreement (1) have
been
authorized by all necessary corporate action, (2) do not and
shall not
violate the terms of any law, regulation, or court order to
which such
party is subject or the terms of any agreement, contract or
other
instrument to which it is a party, and (3) are not subject
to the consent
or approval of any other person, firm or corporation.
|
| ii. |
This
Agreement is a legal, valid, and binding obligation of Accretive
Commerce
and Company, as the case may be, enforceable in accordance with
its terms,
except as limited by bankruptcy and other laws of general application
relating to or affecting the enforcement of creditors’ rights.
|
| iii. |
It
is
not subject to any pending or threatened litigation or governmental
action
that
could interfere with its performance of its obligations
hereunder.
|
|
b.
|
Company.
Company hereby represents and warrants
that:
|
| i. |
It
has
and will maintain during the term of this Agreement,
all necessary authority from all of the corporations, partnerships
and
individuals whose products are offered for sale by Company, to
use their
trademarks, service marks and other intellectual property for the
purposes
of conducting Company’s business. Company’s business as conducted, or as
currently outlined
herein to be conducted by Accretive Commerce on behalf of Company,
does
not and will not cause Company or Accretive Commerce to infringe
or
violate any patents, trademarks, service marks, trade names, copyrights,
licenses, trade secrets or other intellectual property rights of
any other
person or entity.
|
| ii. |
Its
assets exceed its liabilities,
it
is
able to pay its debts as they mature, and that it
is
adequately capitalized.
|
19. INDEMNIFICATION.
|
a.
|
Accretive
Commerce shall indemnify, defend and hold Company harmless from and
against any and all claims, suits, actions, debts, damages, injuries,
costs, charges, and expenses finally awarded, including without limitation
court costs and reasonable attorneys’ fees (collectively “Company
Damages”), which Company may at any time incur to the extent such Company
Damages arise out of or relate to Accretive Commerce’s negligence
or
willful misconduct.
|
|
b.
|
Company
shall indemnify, defend and hold Accretive Commerce harmless from
and
against any and all claims, suits, actions, debts, damages, injuries,
costs, charges, and expenses finally awarded, including without limitation
court costs and reasonable attorneys’ fees (collectively “Accretive
Commerce Damages”), which Accretive Commerce may at any time incur to the
extent such Accretive Commerce Damages arise out of or relate to
(i)
Company’s negligence or willful misconduct, (ii) use or consumption of the
Merchandise, or (iii) Company’s breach of Sections
17(b)(i)
or 17(b)(ii) above.
|
8
|
c.
|
The
indemnification provisions of this Section 18 apply only to claims
made
against either party hereto by any third party and not to any claims
made
by either party hereto against the other. A party hereto seeking
indemnity
hereunder is referred to as the “Indemnified Party” and the other party to
which indemnity is sought hereunder is referred to herein as the
“Indemnifying Party”. An Indemnified Party under this Agreement shall with
respect to claims asserted against such party by any third party,
give
prompt written notice to the Indemnifying Party of any liability
which
might give rise to a claim for indemnity under this Agreement;
provided,
however, that any failure to give such notice will not waive any
rights of
the Indemnified Party except to the extent the rights of the Indemnifying
Party are materially prejudiced. The Indemnifying
Party shall have the right, at its election, to take over the defense
or
settlement of such claim by giving written notice to the Indemnified
Party
at least 15 days prior to the time that an answer or other responsive
pleading or notice with respect thereto is required or ten days
after
notice, whichever is later. If the Indemnifying Party makes such
election,
it may conduct the defense of such claim through counsel of its
choosing
(subject to the Indemnified Party’s approval of such counsel) and shall be
solely responsible for the expenses of such defense and shall be
bound by
the results of its defense or settlement of the claim. The Indemnifying
Party shall not settle any such claim without prior notice to and
consultation with the Indemnified Party, no such settlement involving
any
equitable relief or which might have an adverse effect on the Indemnified
Party may be agreed to without the written consent of the Indemnified
Party.
So long as the Indemnifying Party is diligently contesting any
such claim
in good faith, the Indemnified Party may pay or settle such claim
only at
its own expense and the Indemnifying Party will not be responsible
for the
fees of separate legal counsel to the Indemnified Party, unless
the named
parties to any proceeding include both parties and representation
of both
parties by the same counsel would be inappropriate. If the Indemnifying
Party does not make such election, or having made such election
does not,
in the reasonable opinion of the Indemnified Party proceed diligently
to
defend such claim, then the Indemnified Party may (after written
notice to
the Indemnifying Party), at the expense of the Indemnifying Party,
take
over the defense of and proceed to handle such claim in its discretion
and
the Indemnifying Party shall be bound by any defense or settlement
that
the Indemnified Party may make in good faith with respect to such
claim.
The parties agree to cooperate in defending such third party claims
and
the Indemnified Party shall provide such cooperation and such access
to
its books, records and properties as the Indemnifying Party shall
reasonably request with respect to any matter for which indemnification
is
sought hereunder; and the parties hereto agree to cooperate with
each
other in order to ensure the proper and adequate defense thereof
with
regard to claims of third parties for which indemnification is
payable
hereunder, such indemnification shall be paid by the Indemnifying
Party
upon the earlier to occur of:
|
|
i.
|
the
entry of a non-appealable judgment against the Indemnified Party
and the
expiration of any applicable appeal period, or if earlier, five days
prior
to the date that the judgment creditor has the right to execute the
judgment;
or
|
| ii. |
a
settlement of the claim, provided that if a judgment or settlement
provides that payments may be made in installments, that the
indemnification payments required -to be made hereunder in connection
therewith shall be payab1e in a like manner.
|
|
d.
|
Notwithstanding
the foregoing, providing that there is no dispute as to the applicability
of indemnification, the reasonable expenses of counsel to the Indemnified
Party shall be reimbursed on a current basis by the Indemnifying
Party if
such expenses are a liability of the Indemnifying Party. With regard
to
other claims for which indemnification is payable hereunder, such
indemnification shall be paid promptly by the Indemnifying Party
upon
demand by the Indemnified Party.
|
20. LIMITATION
OF LIABILITY.
|
a.
|
Notwithstanding
any other provision of this Agreement, Accretive Commerce shall not
be
liable to Company for any indirect, special, incidental, punitive
or
consequential damages of any nature whatsoever (including but not
limited
to lost profits or interruption of business) regardless of the form
of
action, whether in contract, tort, or other legal or equitable theory
(including negligence, strict liability, breach of contract or otherwise),
even if Accretive Commerce has been previously notified of the possibility
of such damages.
|
|
b.
|
Without
limiting the foregoing, Accretive Commerce’s aggregate liabilities under
this Agreement for any given calendar
year
regardless of the number of claims and the form of action, whether
in
contract, tort, or other legal or equitable theory (including negligence,
strict liability, breach of contract or otherwise), shall be limited
to
direct damages in the lesser amount of: (1)
payments actually received by Accretive Commerce from
Company under this Agreement for
such calendar
year,
or (2) $1,000,000
|
9
21. INSURANCE.
| a. |
Company
agrees to maintain insurance, at its sole cost and expense, against
loss
or damage by fire or other casualty to Company’s Merchandise on the
premises of Accretive Commerce, and against any claims and liability
growing out of product liability, advertising liability or trademark
or
service xxxx, patent or copyright infringement, and to list Accretive
Commerce as an additional insured thereunder. Such insurance will be
maintained with insurers (i) with rating of A-VII or better
in the current Best’s Insurance Reports published by A. M. Best and
(ii) that are qualified to do business in the state where the
inventory is warehoused. Attached hereto as Exhibit B is the
initial Certificate of Insurance for Company reflecting such coverage.
Company shall provide an updated Certificate of Insurance to Accretive
Commerce each year on the anniversary of the Effective Date or upon
request by Accretive Commerce.
|
|
b.
|
Accretive
Commerce shall not be responsible for the provision or maintenance
of any
insurance coverage for the Merchandise or other inventory or for
Company
or its subsidiaries or respective businesses, products, goods and
property.
|
22. PROCESS;
INTELLECTUAL PROPERTY.
|
a.
|
Company
acknowledges that Accretive Commerce owns all right, title and interest
in
and to, or is licensed to use, the Process and that Company has no
right
or interest whatsoever in such Process unless jointly developed and
agreed
upon in writing by both parties in advance of said joint development.
|
|
b.
|
Accretive
Commerce acknowledges that Company owns all right, title and interest
in
the Data, and Accretive Commerce has no right or interest whatsoever
in
such Data.
|
|
c.
|
ACCRETIVE
COMMERCE® is a registered service xxxx owned by Accretive Commerce. Except
as set forth in Section 35 hereunder, no rights to the use of Accretive
Commerce’s service marks are granted herein, and any right to use
Accretive Commerce’s marks, subsequently granted, will terminate
immediately upon the expiration or termination of this Agreement.
If
Company is subsequently granted the right to use any of Accretive
Commerce’s service marks, Company shall use Accretive Commerce’s marks
only
and strictly
in accordance with the quality control and trademark usage policies
of
Accretive Commerce. Failure to comply with such policies will result
in
termination of the right to use such
marks.
|
|
d.
|
Except
as set forth in Section 35 hereunder, no rights to use of Company’s marks
are granted herein, and any right to use Company marks, subsequently
granted, will terminate immediately upon the expiration or termination
of
this Agreement. Accretive Commerce shall use Company’s marks only and
strictly in accordance with the quality control and trademark usage
policies of Company. Failure to comply with such policies will result
in
termination of the right to use such
marks.
|
23. TERRORISM
OR HAZARDOUS SUBSTANCES.
|
a.
|
Company
represents and warrants to Accretive Commerce that Company shall
not
generate, store or dispose of any Hazardous Substance on, under or
about
Accretive Commerce premises in violation of any federal, state or
local
environmental law, regulation or rule presently in effect or promulgated
in the future as such laws, regulations, or rules may be amended
from time
to time, and that the Merchandise and Non-Merchandise do not contain
any
Hazardous Substance. Company shall indemnify, and defend, protect,
and
hold harmless Accretive Commerce from any claims to the extent arising
out
of or relating to, or alleged to arise out of or relate to, any breach
of
these representations and warranties.
|
|
b.
|
Prior
to the processing of Merchandise, the Company shall give to Accretive
Commerce policies and procedures to follow in the event of any acts
of
terrorism or consumer complaints with respect to Hazardous
Substances.
Provided Accretive Commerce follows such policies and procedures,
Accretive Commerce shall have no liability to the Company arising
from
such any acts of terrorism, Hazardous
Substance
or
consumer complaint, and the Company shall expressly defend, indemnify
and
hold harmless Accretive Commerce from any and all claims, damages,
demands, causes of action, losses, liabilities, injuries, costs and
expenses (including but not limited to reasonable attorney’s fees) arising
from such an event.
|
10
24. COMPLIANCE
WITH LAWS.
Company
and Accretive Commerce shall comply with all laws, rules and regulations,
whether local, state, or federal, applicable to the sale of Merchandise and
to
the provision of Services, respectively.
25. CONFIDENTIALITY;
NON-SOLICITATION.
|
a.
|
During
the Term of this Agreement, it is anticipated that Accretive Commerce
and
Company will come into possession of certain proprietary information
belonging to the other, including but not limited to:
|
| i. |
in
the case of Company, its financial condition, marketing records,
merchandising records, customer records and customer files
and
|
| ii. |
in
the case of Accretive Commerce, its financial condition, cost structures,
staffing levels, systems information, monitoring records, customer
records, customer files, processes, trade secrets, sales forecasts,
general business plans and other confidential or proprietary information
|
| iii. |
all
such information relating to Company or Accretive Commerce shall
constitute “Confidential Information”, the party who receives the
Confidential Information being the “Receiving Party”, and the party to
whom such Confidential Information relates being the “Disclosing
Party”.
|
|
b.
|
Except
as permitted in
connection with an out-sourcing permitted under
Section 3.c,
Accretive Commerce and Company agree that each will not, during the
Term
hereof and five (5) years thereafter, furnish, disclose, or make
accessible to any third party any of the other party’s Confidential
Information unless otherwise instructed by the Disclosing Party in
writing; provided, however, that Confidential Information shall not
include any information that:
|
| i. |
at
the time of disclosure by the Disclosing Party is generally available
to
and known by the public other than as a result of its disclosure
by such
party
|
| ii. |
was
available to the Receiving Party on a non-confidential basis from
a source
other than the Disclosing Party, provided that such source is not
bound by
a confidentiality agreement, or contractual or fiduciary obligation
with
the Disclosing
Party;
or
|
| iii. |
has
been independently acquired or developed by the Receiving Party without
violating any obligations under this Agreement, or of any other agreement
between Company and Accretive
Commerce.
|
|
c.
|
Accretive
Commerce agrees that Company’s customer files maintained
by Accretive Commerce will
not be made available for use by anyone other than Company, without
Company’s specific prior written
permission.
|
|
d.
|
Company
agrees that it shall not at any time during the Term or within three
years
after the termination or expiration of this Agreement, solicit, interfere
with, employ or endeavor to entice away from Accretive Commerce (or
any
Accretive
Commerce
subsidiary or affiliate) any employee, consultant, agent or other
client
of Accretive Commerce.
|
26. NOTICES.
Any and
all notices and all communication provided for in this Agreement shall be given
in writing. Such notices and other communications shall be deemed given when
received, when delivered by hand, by confirmed facsimile transmission or when
deposited in the United States Mail, Registered or certified, with proper
postage prepaid, and addressed as specified in the Statement of Work, or to
such
other address as Accretive Commerce or Company may designate to the other in
writing.
27. NON-ASSIGNMENT.
This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns. Except as expressly set
forth
in this Agreement, the parties do not intend the benefits of this Agreement
to
inure to any third party, and nothing contained herein shall be construed as
creating
any right, claim or cause of action in favor of any third party against either
of the parties hereto. Except
as
permitted by Section
3.c,
neither
party
may assign this Agreement or any rights hereunder or delegate any of its
obligations hereunder without the prior written consent of the other party,
and
any such attempted assignment shall be void; provided however, either party
may
assign this Agreement to any person, firm or corporation that purchases all
or
substantially all of the stock or assets of either party or to any person,
firm
or corporation into which or with which either party consolidates or merges
and
provided further that Accretive Commerce may assign this Agreement
to any
of its affiliates, subsidiaries, or its parent company.
11
28. AMENDMENTS.
This
Agreement shall not be modified or amended except by a written amendment
specifically
referencing this Agreement and signed by authorized representatives of both
Accretive Commerce and Company. Except as expressly permitted herein, the terms
of any Instrument shall supplement and not replace or amend the terms or
provisions of this Agreement, and the terms and provisions of this Agreement
shall control in the event of any conflict between such terms
thereof.
29. GOVERNING
LAW.
This
Agreement has been entered into and shall be governed, construed, and
interpreted in accordance with the laws of the State of California without
reference to any conflicts of law principles. The parties hereby consent to
the
exclusive jurisdiction of the state and federal courts located in California
to
resolve any disputes arising hereunder. The parties waive any objection to
such
forum based on lack of personal jurisdiction, forum non conveniens or
otherwise.
30. RELATIONSHIP.
Nothing
contained in this Agreement shall be construed to imply a joint venture,
partnership or principal/agent relationship between the parties. Except as
specifically set forth herein, neither party by virtue of this Agreement shall
have any right, power or authority to act or create any obligations, express
or
implied, on behalf of, or for the use of the other party, and Accretive Commerce
and Company shall not be obligated, separately or jointly, to any third party
by
virtue of this Agreement.
31. HEADINGS.
The
headings and section numbers appearing in this Agreement are inserted only
as a
matter of convenience and in no way define, limit, construe or otherwise
describe the scope or intent of the sections of this Agreement.
32. SEVERABILITY.
If any
one or more provisions of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired; provided, however, that in such case the parties agree to use their
commercially reasonable efforts to achieve the purpose of the invalid provision
by a new legally valid provision.
33. NO
WAIVER.
No
failure, waiver or delay of either party’s exercise or partial exercise of any
right or remedy under this Agreement shall operate to limit, impair, preclude,
cancel, waive or otherwise affect such right or remedy. Any waiver by either
party of a breach by the other party of any provision of this Agreement shall
not imply a waiver of future compliance with the provision, and the provision
shall remain in full force and effect. Notwithstanding anything to the contrary
in this Agreement, all rights and remedies under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
34. ENTIRE
AGREEMENT.
This
Agreement, any exhibits and addenda attached hereto, properly executed
Statements of Work, orders for Special Services and properly delivered notices,
contain and embody the entire agreement of the parties hereto, and no
representations, inducements, or agreements, oral or otherwise made at any
time
between the parties or with any third party relating to the subject matter
hereof which are not contained in this Agreement or in the exhibits or addenda,
if any, shall be of any force or effect. In
the
event of a conflict between the terms of this Agreement and those of a Statement
of Work, the provisions of the Statement of Work shall take precedence, but
only
for purposes of the services and deliverables covered in such Statement of
Work.
35. COUNTERPARTS.
This
Agreement may be executed in one or more counterparts, and each of which when
so
executed shall be an original, but all of which shall constitute one and the
same instrument.
36. JOINT
MARKETING.
Company
may provide a statement to be used in an Accretive Commerce press release,
which
announces the choice of Accretive Commerce to provide Services. Company may
authorize Accretive Commerce to use Company’s logo on the Accretive Commerce
website, at tradeshows and events and on marketing collateral. Company is not
obligated to allow joint marketing with Accretive Commerce but will consider
it
during the course of the contract; any use of Company name and/or logo must
be
approved in writing by Company representative. Accretive Commerce and Company
may participate in other joint marketing activities, as deemed appropriate,
when
mutually agreed to by both companies.
12
37. CONSENT.
Whenever this Agreement requires either party’s approval or consent, such
approval or consent shall not be unreasonably withheld or delayed.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed by their duly empowered
representatives as of the Effective Date.
|
Accretive
Commerce, Inc. (“Accretive
Commerce”)
|
Valcent
Products, Inc. (“Company”)
|
|
|
By:
/s/ Xxxx Xxxxxx
|
By:
/s/ Xxxx Xxxxxx
|
|
|
Name:
Xxxx Xxxxxx
|
Name:
Xxxx Xxxxxx
|
|
|
Title:
Division President
|
Title:
President, Consumer Products
|
|
|
Date:
12/02/06
|
Date:
12-01-06
|
13
EXHIBIT
A
STATEMENT
OF WORK
For
____________________________
Accretive
Commerce will provide the following services:
|
·
|
Inventory
management systems for tracking parts, products and
offers/upsells
|
|
·
|
Inventory
receipt and put away within 24 hours of delivery of inventory at
Accretive
Commerce warehouse
|
|
·
|
Inventory
storage
|
|
·
|
Integration
with Company’s third party call center ImPulse and third party webstore
______________ for daily download of orders
|
|
·
|
Integration
with _____________ payment processor for credit card, authorization
&
settlement
|
|
·
|
Printing
of packing slip or shipping label and shipping approved orders direct
to
consumer within 24 hours of receipt via mutually agreed freight carrier
on
Accretive Commerce account
|
|
·
|
Pre-sale
and post-sale customer support (including save-the-sale options)
via an
Accretive Commerce owned toll free number during published Accretive
Commerce hours.
|
|
·
|
Transfer
of product calls back to Company’s customer service as
necessary
|
|
·
|
Receipt
and processing of customer returned
orders
|
|
·
|
Transmission
of credit card refunds to payment processor ______________ for returned
orders
|
|
·
|
Repacking
and refurbishment of returned
inventory
|
|
·
|
Disposal
of obsolete and/or damaged inventory as approved by
Company
|
|
·
|
Unlimited
secure access to the Accretive Commerce online reporting
system
|
|
·
|
Physical
inventory upon Company request
|
|
·
|
Merchandise
Inventory shrinkage due to Accretive Commerce’s negligence or willful
misconduct will not exceed 3% (as referenced in section
11a)
|
|
·
|
Non-Merchandise
Inventory shrinkage due to Accretive Commerce’s negligence or willful
misconduct will not exceed 10% (as referenced in section
11a)
|
Accretive
Commerce warehouse location:
00000
Xxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Accretive
Commerce will charge Company the following prices for the services listed
above:
14
Nova
Skincare System Pricing
Los
Angeles Facility
| ACCOUNT SET-UP | |
| 1) Initial set up | $750.00 |
| TRANSACTION PRICING | |
| Fulfillment | |
| 2) Download or upload order charge | $ .05 / each |
| 3) Credit card authorization or check processing | $ .05 / attempt |
| 4) Order processing fees (prepackaged / ship-ready / <15 lbs.) | $ .60 / each |
| a) 10,000+ orders per week | |
| b) 5,001-10,000 orders per week | $ .65 / each |
| c) 0-5,000 orders per week | $ .70 / each |
| 5) Additional item order processing charges (products into shipping box or bag) | |
| a) 10,000+ orders per week | $ .10 / each |
| b) 5,001-10,000 orders per week | $ .15 / each |
| c) 0-5,000 orders per week | $ .20 / each |
| 6) Strapping fee (if required) | $ .15 / each |
| 7) Additional item order processing charges (literature) | |
| a) 10,000+ orders per week | $ .05 / each |
| b) 5,001-10,000 orders per week | $ .10 / each |
| c) 0-5,000 orders per week | $ .15 / each |
| 8) Credit card resubmission | |
| a) Resubmit declined cards | $ .50 / each |
| b) Credit to customer’s credit card | $ .50 / each |
| c) Credit to customer by check | $2.00 / each |
| 9) Packaging, Material and Labor Costs (as required) | Cost + 15 % |
| 10) Order cancellation | $5.00 / order |
| 11) Restocking/General labor | $33.00 / hour |
| 12) Receiving | |
| a) Floor loaded container | $150.00 / each |
| b) Partial container | $33.00 / hour |
| 13) Refurbish / repack | Quoted by product |
| 14) Inventory Storage (by month) | $12.00 / pallet |
| 15) Return Order Processing | $1.50 / each |
15
TRANSACTION
PRICING (continued)
| Customer Service | |
| 17) In / outbound telephone call / e-mail inquiry & response | $ .86 / minute |
| 18) IVR charge | $. 25 / minute |
| 19) Customer e-mail notification | $ .03 / each |
| - Includes order status and shipping notification | |
| 20) Mail response (all mail response pricing + postage) | |
| a) Form letter | $1.00 / each |
| b) Custom letters | $2.00 / each |
| c) Postcards (client supplies card stock) | $ .25 / each |
| 21) Fax processing - customer service inquiries | $1.00 / each |
| 22) Data entry (i.e. check orders / rebates) | $ .75 / each |
| 23) Merchandise return label | $1.25 / each |
| - RMA label printed and mailed to customer | |
| 24) Customer service center phone T-1 access | $150.00 / month |
| FREIGHT / SHIPPING | |
| 25) Reserve / freight account | 1 month advance |
| - Equal or greater than one month’s expense | |
| - Payment Terms: Services 7 days, Freight advanced, Postage Prepaid | |
| 26) Freight / postage billed as quoted | |
| 27) Rush / priority orders | $2.00 / each |
| 28) Canada / Puerto Rico orders, international orders | $2.50 / each |
| 29) 3rd party billing (includes consignee billing) | $2.00 / each |
| 30) USPS Priority Mail Delivery Confirmation | $. 60 / each |
| a. Standard Mail “B” delivery confirmation | |
| 31) USPS Priority Mail Signature Confirmation | $1.25 / each |
| 32) UPS Call Tags, tracing or claim | $5.00 / each |
| CLIENT SERVICES / IT | |
| 33) Account management (as needed) | $75.00 / hour |
| 34) Database / program changes after initial set-up / approval | $85.00 / hour |
| 35) Custom programming (as needed) | $150.00 / hour |
Exhibit
B Company’s
Certificate of Insurance
To
be
provided prior to contract execution
16
