Confidential portions of this
document have been omitted and filed
separately with the Securities and
Exchange Commission
MASTER AGREEMENT FOR NATIONAL FULFILLMENT SERVICES
This MASTER AGREEMENT (the "Agreement") is made effective as
of October 25, 1996, by and between Audio Book Club, Inc., a Florida corporation
("Client") located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, and National Fulfillment Services, Inc., 8 Pennsylvania corporation
("NFS") located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Client hereby requests that NFS provide the marketing services
described herein (the "Services") and, upon acceptance by NFS by execution by
its authorized representative in the space provided below, this Agreement shall
become a binding Agreement between NFS and Client, pursuant to which NFS agrees
to provide the Services to Client upon the Terms and Conditions stated in this
Agreement.
ACCEPTED AND AGREED TO:
Client: Audio Book Club. Inc.
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Contact Person: ▇▇▇▇ ▇▇▇▇▇▇▇
Direct Phone: ( )
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------- --------------------------
(Authorized Signature) (Typed Name)
Title: Vice Chairman
Accepted by NFS this 30th day of October, 1996.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- --------------------------
(Authorized Signature) (Typed Name)
Title: President
1. Commencement of Services. Services shall commence as follows:
SERVICE EFFECTIVE DATE
Book Club Fulfillment October 25, 1996
2. Duration and Termination of Service. Service hereunder shall
continue until October 31, 1998 or until terminated by Client or NFS on written
notice specifying as a termination date the end of the second (or any
subsequent) calendar month following the calendar month in which such notice
shall have been served.
3. Conversion Fee. NFS agrees and acknowledges that any conversion fee
due NFS will be billed to and paid by ▇▇ ▇▇▇▇▇▇▇▇▇ & Sons Company in connection
with ▇▇ ▇▇▇▇▇▇▇▇▇ & Sons Company agreement to pay such conversion fee for Client
and NFS will not look to Client for amount of such fee and if such fee is not
paid, this Agreement will nevertheless continue in full force and effect.
4. Non-Divulgence. All information that NFS acquires from Client with
respect to the Services shall be considered confidential and proprietary
information of Client. NFS agrees not to use such information except for the
purpose of performing the Services and agrees not to disclose such information
to others, except to those NFS employees and agents who reasonably require such
information in the performance of the Services. NFS will use reasonable care in
safeguarding such information and shall, upon written request of Client, return
such information to Client upon the termination of this Agreement.
Notwithstanding the other provisions of this paragraph, NFS shall not be
prevented from disclosing such information (i) which, at the time of disclosure,
was in the public domain, (ii) which was lawfully disclosed to NFS on a
non-confidential basis by a third party who is not bound by a confidentiality
agreement with Client, (iii) which is disclosed with Client's prior Written
approval or (iv) in response to valid legal process, whether issued by a court
or administrative or regulatory body. Notwithstanding any other provisions of
this Agreement to the contrary, NFS shall maintain absolutely confidential all
customer names and customer lists of the Client and shall not disclose such
information to others. NFS acknowledges that a breach of this provision will
cause Client substantial and irreparable damages and therefore NFS agrees that
the Client will be entitled to injunctive relief for such breach or threatened
breach in addition to all other remedies that the Client may otherwise be
entitled.
5. Banking Facilities. If necessary for the provision of Services,
Client shall establish a bank account in Pennsylvania, into which NFS shall
deposit funds received for the account of Client. If Client so desires to
establish a bank account outside of Pennsylvania, then NFS shall send, each day,
by Federal Express, all checks, money orders or other funds received by NFS that
day, together with a deposit slip, to such bank using Client's Federal Express
account number, and shall send by facsimile to Client a copy of such deposit
slip on a daily basis.
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6. Property Rights of Client, Etc.:
(a) Ownership of Client's Property. Magnetic tapes containing
names on Client's proprietary lists, including, but not
limited to, all member names and subscription information
microfilmed and other records, promotional letters and
messages, stationery, Client's credit billing forms and other
special material furnished to NFS by Client or purchased from
NFS by Client are deemed to be the property of Client
(b) Return of Client's Property. Upon termination of the
Services or any portion thereof, NFS, upon receipt of a
written request from Client, will promptly return to Client
any portion of its property (then in NFS's possession or under
its control and not required for the efficient completion of
Services) specified in such request. The remainder of Client's
property shall be returned to Client promptly following
completion of Services
(c) Completion of Services. Following the return of any
property as provided in paragraph 6(b), NFS shall complete the
performance of all Services required hereunder.
(d) Extra Magnetic Tapes. NFS, at least once every three
months or on written notice from Client, will furnish one
complete set of magnetic tapes containing the names on
Client's proprietary lists, such set to be in addition to
those required by NFS in providing Services
7. Tape Format. Promptly following notice served by Client or on
delivery of any tapes furnished pursuant to paragraph 6(d) of this Agreement,
NFS will deliver to Client a tape format which will enable Client to interpret
the magnetic tapes (mentioned in paragraph 6(a) of this Agreement) in converting
to another fulfillment system.
8. Responsibility for Errors. In the event of errors, inaccuracies or
omissions by NFS or its employees, NFS shall immediately attempt, in good faith,
at its sole expense to correct the error, inaccuracy or omission. The above is
not in limitation of any of the Client's other rights and remedies which may
exist for a breach by NFS of this Agreement.
9. Non-Performance. If NFS shall fail in any material respect for any
reason to furnish any Service or deliver any material required under this
Agreement, NFS agrees either to re-perform such Service or to refund to the
Client any amounts paid for such Service or material (or to credit such amounts
against future invoices). The above is not in limitation of any of the Client's
other rights and remedies which may exist for a breach by NFS of this Agreement.
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10. Assignability.
Client reserves the right to assign, transfer, set over or
sell its rights in and to this Agreement to an affiliate of
Client; a successor to all or substantially all of the
business of Client; or an entity with which Client is merged
or consolidated, and upon the assumption of this Agreement by
the assignee, the assignee shall be solely responsible for all
obligations of Client hereunder.
11. Notice. Deposit of any notice required hereunder in the United
States mails addressed, by certified mail, return receipt requested, or by
overnight delivery service to the Client at:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice Chairman
or to NFS at:
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Attn:_____________________________________
or personal delivery shall constitute serving notice.
12. Due Authorization. The parties hereto have caused this Agreement to
be executed and delivered by their respective duly authorized officers.
13. Invalid Portions. If any portion of this Agreement is found to be
invalid or unenforceable, the parties agree that the remaining portions shall
remain in full force and effect.
14. Receive Mail. NFS will receive and promptly process all incoming
transactions, including' but not limited to, payments, orders, enrollments,
customer service inquiries, and correspondence via mail, facsimile, telephone
and electronic means. All orders, payments, enrollments, and customer service
inquiries will be processed and entered into the system. The following service
level standard will apply:
Mail 80% in one day, 100% in two days.
Electronic Mail 100% in one day.
Fax Orders 80% in one day, 100% in two days.
Balance 100% in three days.
Billing and Statementing:
-------------------------
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Invoices sent to RRD 24 hours
Lettershop 24 hours
All Records Sent to Lettershop Within 24 hours
------------------------------
Return Processing: 100% within 24 hours of receipt from RRD
-----------------
Payment Processing: 90% within 24 hours of receipt
------------------- 100% within 48 hours of receipt.
NFS will take telephone, mail and electronic inquiries from prospects daily and
will mail Client information packages to these prospects at least two (2) times
per week.
15. Daily Deposits. For each date that is not a legal bank holiday, NFS
will make deposits of cash, checks and money orders received in Client's name to
an account maintained by Client at a bank chosen by Client in Pennsylvania (the
"Bank"). The Client, at its option, may choose a bank outside of Pennsylvania
(also defined as a "Bank"), and if the Client so chooses such Bank, then NFS
will send by Federal Express each day all funds received on such day, together
with a deposit slip to such Bank using Client's Federal Express account number
and will send by facsimile to Client a copy of such deposit slip. Furthermore,
NFS will provide a daily deposit report to Client each day that is not a legal
bank holiday.
16. Maintain Records. NFS will maintain on magnetic media an itemized
record of each customer's account and all its transactions.
17. Accounts Receivable. NFS will maintain a customer accounts
receivable system using Client's credit rules, which may be revised or
supplemented as needed by NFS. Changes to credit rules will be made by NFS
within forty-eight (48) hours of Client's written notice.
18. Customer Service. NFS recognizes that Client is committed to a high
level of customer service and satisfaction. NFS will take reasonable appropriate
actions to satisfy customers' inquiries and/or complaints and to provide service
to Customer in accordance with Client written policies. The following service
standard levels will apply.
Average Speed of Answer 85% within 20 seconds
Abandonment Rate Less than 5%
White Mail 100% in three days
Electronic 100% in 24 hours
19. Management Reports. NFS will supply, through printed and/or
electronic means, a standard report package, including, but not limited to, all
reports included in the package entitled "Audio Book Club Standard Report
Package", to be provided by NFS and attached to this Agreement hereto In
addition, NFS will apprise Client of any new reports as they become available
and will make them part of Client's standard report package if Client desires to
have them. Client will receive each report daily, weekly or monthly as noted in
the Audio Book Club Standard Report Package".
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20. Duplicates of Magnetic Tapes. NFS will store a complete master file
of Program Customer names and addresses (grandfather tapes) in Client's Florida
location as noted in paragraph 11 of this Agreement, sent to the attention of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice Chairman.
21. Fulfillment Terms.
Monthly Per Member Charge for Active Members $/Mmbr/Mo
-------------------------------------------- ---------
Under 7,500 **
7,500 and over
10,000 and over
15,000 and over
25,000 and over
35,000 and over
50,000 and over
75,000 and over
100,000 and over
150,000 and over
200,000 and over
250,000 end over
300,000 and over
400,000 and over
** Minimum Monthly Charge. . . . . . . $
Monthly Per Member Charge for Canceled Members $
Monthly per Member Charge for Active Members includes, but is not limited to all
member related activity excluding product distribution and Lettershop services.
A member is considered canceled if his status is 'canceled' and the account is
not in collection. In other words, if no further processing is to be done on the
account. The $ is, in essence, a storage fee.
Stuffing/Inserting $ per M
Special Clerical (Client requested) $ per hour
Programming Services $ per hour
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Mailing List Output
A. Cheshire Labels $ per M
$ Minimum Charge
B. Magnetic Tape: Same as A above plus $ per Tape (refundable)
C. Pressure Sensitive Labels $ per M
$ Minimum Charge
Disk Creation/BBS Services $ per File Run
All Payment Terms Due Net 30 Days.
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