Letter of Agreement June 29, 2007
Letter
of Agreement
June
29,
2007
Services:
Advantage
Media Services, Inc. (AMS) will perform warehousing, assembly, packaging
and/or
fulfillment services (Services) on behalf of Ironclad Performance Wear
Corporation, a California corporation (Ironclad). AMS shall make its best
and
commercially reasonable efforts to perform these Services in a manner consistent
with custom and practice in the fulfillment industry, and to the satisfaction
of
Ironclad.
Term:
Both
AMS
and Ironclad enter into this agreement with the anticipation of an ongoing
and
mutually beneficial business relationship Notwithstanding the above, either
party may terminate this agreement, with or without cause, upon sixty (60)
days
written notice to the other party.
Fees
and Payment Terms: Pricing
for Services is outlined in EXHIBIT “A”. Payment terms for Services are 30 days
from the date of invoice, postage/freight prepaid, materials due upon receipt,
and AMS reserves the right to suspend Services if payment is not received
within
this timeframe. If Ironclad, in good faith, disputes any amount billed, the
undisputed amounts will be paid by the invoice due date and the reasons for
the
disputed amounts shall be reported to AMS, in writing, prior to the due date
of
the invoice. Both parties agree to work diligently to resolve the dispute
within
15 days after receipt of such written notice by AMS. AMS will continue to
provide undisputed services during the 15 day period, providing all undisputed
amounts have been paid by the due date. Failure to resolve such dispute during
the 15-day period shall allow AMS to suspend services, or if both parties
agree,
provide services on a pre-paid basis, until the dispute has been resolved.
AMS
has the absolute right to suspend all services if payment is not made within
these terms, or if the total amount of undisputed outstanding fees owed to
AMS
reaches or exceeds the wholesale value of the inventory of the products in
AMS
possession. AMS and Ironclad will make their best efforts to transact business
in a manner and cost structure that meets the basic needs of both parties,
and
as such either party may request to adjust Fees and Payment Terms from time
to
time throughout the Term. Any future Fee and Payment Term adjustments, or
any
additional services that are required/requested by Ironclad but not included
in
EXHIBIT “A”, will be noted as updates to EXHIBIT “A”, and must be agreed to in
writing by both AMS and Ironclad in order to be deemed active and approved.
This
agreement and pricing must be accepted within 30 days from the proposal date
by
signature of Ironclad on the last page of the agreement. In the absence of
written acceptance, the act of tendering goods described herein for storage
or
other services by AMS within 30 days from the proposal date shall constitute
such acceptance by Ironclad.
Inventory:
AMS will store Ironclad inventory at its facilities, and in doing so will
serve
as a separate warehouse location for Ironclad. All deliveries must be
prepaid, AMS does not accept COD deliveries. Title to and risk of loss for
all
Ironclad inventory stored at AMS will remain with Ironclad, and upon termination
of this agreement, all inventory will be returned to Ironclad not later than
five (5) business days following Ironclad’s written request thereof, provided,
however, that AMS shall be permitted to retain an amount of inventory, if
any,
that has a value equal to the then outstanding amounts deemed proper, due
and
owing to AMS by Ironclad, provided, further, however, that AMS shall only
be
permitted to retain such inventory until such time that Ironclad pays any
and
all such amounts, if any, after which time all such inventory shall be returned
to Ironclad no later than five (5) business days following Ironclad’s written
request thereof. Notwithstanding the specific receiving rules as
established during the CTP, AMS will utilize Ironclad supplied paperwork
with
each incoming delivery to receive inventory data into its systems and verify
counts manually via carton count, including spot check of carton contents
as
deemed necessary by AMS to ensure accuracy, at rates defined in Exhibit “A”.
Ironclad will supply purchase order paperwork in advance of receipt at AMS
and
any discrepancies will be noted and reported to Ironclad immediately once
uncovered. If discrepancies are uncovered during the receiving process, AMS
will
escalate manual count verification to 100% of the items in question. In any
given calendar year, or such shorter period as is determined by Ironclad
in its
sole discretion, AMS will be allowed an inventory shrinkage level of no more
than one percent (1%) of the total value of Ironclad inventory stored at
and
shipped from AMS facilities, determined based on the total number of units
shipped through the AMS facility during the time period under review plus
the
total ending inventory at the time of the physical inventory. For the avoidance
of doubt, inventory shrinkage at any applicable date will equal the difference
between (i) the audited physical inventory, to be performed by AMS and audited
by Ironclad (or its assigned auditing agency) on the applicable date, less
(ii)
the perpetual inventory recorded on Ironclad’s books and records within AMS’
operating system, plus any and all inventory adjustments (write-offs, net
cycle
count adjustments, etc.) during the time period in question (typically twelve
(12) months. If the initial results of the physical inventory indicate that
the
shrinkage level exceeds the maximum level permitted, AMS will be allowed
up to
fifteen (15) days to perform research on the inventory which is intended
to
explain why some or all of the shrinkage had occurred (hereinafter referred
to
as “Discrepancy Research”, and present the results of these findings, if any, to
Ironclad. In the event that, on or after an applicable measurement date,
Ironclad delivers written notice that AMS’ inventory shrinkage level exceeds the
maximum level permitted hereunder (which notice shall include AMS’ validated
information relevant to Ironclad’s calculation thereof including any Discrepancy
Research submitted by AMS), AMS shall, within thirty (30) days of Ironclad’s
delivery of such notice, pay to Ironclad the amount of any such excess inventory
shrinkage. Notwithstanding the foregoing, AMS is not responsible for inventory
shrinkage where AMS is unable to receive inventory in accordance with the
procedures described above, or as described separately to Ironclad in writing,
due to circumstances outside of AMS control (i.e. rush situations, no supplied
paperwork, etc.). In the course of providing the Services, AMS shall at all
times comply with, and provide its Services in accordance with, any and all
routing guides, shipping instructions or other instructions provided by Ironclad
from time to time (the “Instructions”). In the event that, in any given calendar
quarter, Ironclad incurs, as a result of the failure by AMS to comply with
such
Instructions, any third party costs, expenses or charges, including, without
limitation, customer chargebacks or other charges imposed on Ironclad by
its
customers or other third parties, in an amount that exceeds 0.5% of the net
revenue Ironclad actually receives from the sale of Ironclad inventory processed
by AMS in such calendar quarter (the “Charges”), Ironclad shall provide notice
thereof (which notice may be made through electronic mail) to AMS, and for
a
period of thirty (30) days thereafter, Ironclad shall use its commercially
reasonable efforts, working in collaboration with AMS, to obtain from the
applicable customer or third party a reimbursement or credit for such Charges.
In the event that, on or before the expiration of such thirty (30) day period,
the parties are not able to obtain a reimbursement or credit of such Charges,
AMS shall pay and reimburse to Ironclad, within ten (10) days of the delivery
of
Ironclad’s written invoice therefore, any and all such Charges.
Insurance: Ironclad
agrees to maintain insurance, at its sole cost and expense, against loss
or
damage by fire or other casualty to Ironclad inventory on the premises of
AMS,
and against any claims and liability growing out of product liability,
advertising liability or trademark or service xxxx, patent or copyright
infringement. Ironclad will maintain comprehensive liability insurance,
including products liability, covering the Products. AMS agrees that it shall
make commercially reasonable efforts to ensure that all of its warehouses
at
which any merchandise or other inventory or property of Ironclad is held
shall
be operated and maintained in a manner that is consistent with custom and
practice in the fulfillment industry.
Advantage
Media Services, Inc.
00000
Xxxxxxxx Xxxxxx Xxxxx, #0 0 Xxxxxxxx, XX 00000
Phone:
661/000-0000 0 Fax: 661/000-0000
xxx.xxxxxxxxxxxxxx.xxx
Security
Deposit:
In cases
where AMS is processing shipments through its own accounts (i.e. UPS, USPS,
FedEx, LTL…etc.), Ironclad must maintain on deposit with AMS a dollar amount to
cover average shipping and returns postage costs at all times. AMS will adjust
the dollar amount to be deposited in accordance with estimated volumes. AMS
will
not ship under its own carrier account(s), and reserves the right to hold
all
shipments regardless of carrier account, if the amount of freight/postage
owed
to AMS exceeds the amount in the reserve account.
In cases where Ironclad wishes to utilize its own carrier account, the account
numbers must be supplied at time of account set-up. AMS will use its best
efforts to ensure all shipments are done on the established carrier account,
however it is acknowledged and agreed that occasional shipments for manual
orders and special projects may inadvertently be shipped on an AMS carrier
account, which will be invoiced to Ironclad accordingly.
Intellectual
Property:
AMS
acknowledges and agrees that as between the parties, Ironclad shall, at all
times, exclusively own all right, title, and interest in and to the intellectual
property contained in and/or arising from its products. AMS will not grant,
nor
claim for itself or other affiliated entities, independent contractors, or
employees, either expressly or impliedly, any rights, title, interest, or
licenses to such intellectual property. Ironclad
shall indemnify and hold AMS harmless from all third party claims alleging
that
Ironclad’s products infringe any copyright, trademark, or misappropriation of
name or likeness of such third party.. If a third party claim, action, suit
or
proceeding is brought against AMS resulting from its Services hereunder and
based on an allegation that Ironclad’s products infringe any copyright,
trademark, or misappropriation of name or likeness of such third party, then
Ironclad may at its own election (and at its own expense) (i) replace
substantially equivalent intellectual property for the infringing item, (ii)
modify or fix the infringing item so that it no longer infringes, or (iii)
obtain for the benefit of AMS the right to continue using such item in
accordance with this Agreement. If AMS is claiming indemnification pursuant
to
this Section, it shall promptly notify Ironclad of any such claim of which
it
becomes aware and shall: (i) at its own expense, provide reasonable cooperation
to Ironclad in connection with the defense or settlement of any such claim,
and
(ii) at its own expense, be entitled to participate, to the extent possible
under applicable law, in the defense of any such claim. AMS agrees that Ironclad
shall have sole and exclusive control over the defense and settlement of
any
such third party claim. The liability of Ironclad regarding infringement
of any
copyright or other intellectual property right of any third party shall be
limited to this Section.
Limitation
of Liability:
Neither
party to this agreement will be liable to the other party for any indirect,
incidental, special, or consequential damages, including, without limitation,
damages for lost opportunities, lost profits from this agreement, or lost
savings, even if such damages are foreseeable or result from a breach of
this
agreement. Except in the case of AMS’ indemnification obligations hereunder,
Ironclad agrees that AMS’ liability to Ironclad under this agreement shall be
limited to the total amount of service fees paid by Ironclad to AMS (excluding
3rd
party
charges) that pertain to or relate to the incident(s) that xxxxxx such
liability. The provisions of this section shall survive the termination of
this
agreement.
Indemnification:
AMS and
Ironclad agree that their relationship is that of independent contractors
with
each other, and nothing herein or about their relationship shall make one
the
partner, employee, or joint venturer of or with the other. In this connection,
Ironclad acknowledges that AMS is performing services relating to the
warehousing and fulfillment of products on behalf of Ironclad. Accordingly,
Ironclad agrees to indemnify, defend, and hold AMS harmless from and against
any
third party claims, including, without limitation, claims for damages, injury
to
persons, fraud, etc., that may arise from Ironclad’s products, except for such
claims arising solely out of AMS’ gross negligence or willful misconduct, or for
such other claims for which AMS is indemnifying Ironclad hereunder, for which
AMS shall indemnify, defend, and hold Ironclad harmless. AMS agrees to
indemnify, defend, and hold Ironclad harmless from and against any third
party
claims, including, without limitation, claims for damages, injury to persons,
fraud, etc., that may arise from (i) AMS’ Services hereunder, including, without
limitation, from its warehousing, assembly, packaging and/or fulfillment
of
Ironclad products; (ii) any Instruction Charges incurred by Ironclad, or
any
failure by AMS to comply with the Instructions; and/or (iii) any AMS employment
or independent contractor matters (e.g., workers compensation and/or person
injury claims), or AMS’ operation of its business (but excluding claims for
which Ironclad is indemnifying AMS hereunder). If a party (the “Indemnified
Party”) is claiming indemnification pursuant to this Section, it shall promptly
notify the other party (the “Indemnifying Party”) of any such claim of which it
becomes aware and shall: (i) at its own expense, provide reasonable cooperation
to the Indemnifying Party in connection with the defense or settlement of
any
such claim, and (ii) at its own expense, be entitled to participate, to the
extent possible under applicable law, in the defense of any such claim. The
Indemnified Party agrees that the Indemnifying Party shall have sole and
exclusive control over the defense and settlement of any such third party
claim.
Confidential
Information:
Without
limitation to the foregoing, each party acknowledges that the nature of the
relationship being undertaken hereunder may require the disclosure of
proprietary, know-how and/or confidential information of the other party,
including but not limited to any and all information relating to Ironclad’s
customers, or trade secrets of AMS or Ironclad, (“Confidential Information”),
and each agrees to keep Confidential Information in the strictest of confidence
and not to disclose Confidential Information to others or benefit from the
use
thereof, directly or indirectly, either during or after the termination of
this
relationship, without the express written consent of the party to whom such
information belongs. Confidential Information shall exclude any information
that
(i) has been or is obtained by the receiving party from a source independent
of
the disclosing party and not receiving such information from the disclosing
party, (ii) is or becomes generally available to the public other than as
a
result of an unauthorized disclosure by the disclosing party or its personnel,
(iii) is independently developed by the receiving party without reliance
in any
way on the Confidential Information provided by the disclosing party, or
(iv)
the receiving party is required to disclose under judicial order, regulatory
requirement (including, without limitation, regulations promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended), or statutory requirement,
provided that the receiving party provides written notice and an opportunity
for
the disclosing party to take any available protective action prior to such
disclosure (except with respect to any disclosures arising as a result of
the
securities laws or any regulations promulgated thereunder).
Advantage
Media Services, Inc.
00000
Xxxxxxxx Xxxxxx Xxxxx, #0 0 Xxxxxxxx, XX 00000
Phone:
661/000-0000 0 Fax: 661/000-0000
xxx.xxxxxxxxxxxxxx.xxx
Arbitration:
This Agreement shall be governed by and construed in accordance with the
laws of
the State of California. Any controversy or claim arising out of or relating
to
this Agreement, or the breach thereof shall be submitted to final and binding
arbitration before the American Arbitration Association in accordance with
its
Commercial Arbitration Rules and with a panel consisting of one arbitrator
unless that number be increased by consent of both parties. The arbitrator
shall
have expertise in the subject matter of the dispute. However, in any arbitration
proceeding arising under this Agreement, the arbitrator shall not have the
power
to change, modify or alter any express condition, term or provision hereof,
and
to that extent the scope of his or her authority is limited. Pre-hearing
discovery shall not be used and the Federal Rules of Evidence, including
all
rules of privilege, shall apply to proceedings conducted in connection with
the
arbitration. Before rendering a final decision, the arbitrators will first
act
as friendly, disinterested parties for the purpose of helping the parties
reach
compromise settlements on the points in dispute. The expenses of the arbitration
shall be borne equally between the parties to the arbitration; however, each
party shall pay for and bear the cost of its own expert, evidence and legal
counsel. The arbitration hearings shall be closed and the arbitration shall
be
completed within one hundred twenty (120) days of giving notice and filing
of a
demand to arbitrate with the American Arbitration Association (whichever
shall
first occur). Judgment on the award rendered by the arbitrator may be entered
and enforced in any court of competent jurisdiction. The arbitration shall
take
place in Santa Clarita, California. The testimony, evidence, ruling and all
associated documentation regarding any arbitration shall be considered
confidential information, and neither party may use, disclose, or divulge
any
such information. Notwithstanding
the foregoing, (A) in the event that any controversy or claim arising out
of or
relating to this Agreement is in an amount equal to or less than the
jurisdictional amount specified at such time by the small claims court in
Los
Angeles, California, then either party shall be entitled to bypass arbitration
and proceed to small claims court for a final determination by said small
claims
court of such controversy or claim, and in such instance, the parties hereto
hereby consent and submit to the jurisdiction of the small claims court in
Los
Angeles, California, hereby agree that service of process on any party may
be
effected by certified mail, return receipt requested, postage prepaid, and
hereby waive any objection which they may have based on improper venue or
forum
non conveniens to the conduct of any such suit or action in such court; and
(B)
in the event that any controversy or claim arising out of or relating to
this
Agreement is in an amount greater than the jurisdictional amount specified
at
such time by the small claims court in Los Angeles, California, then either
party shall be entitled to bypass arbitration and proceed to a court of
competent jurisdiction for a final determination by said court of such
controversy or claim, and in such instance, the parties hereto hereby consent
and submit to the jurisdiction of the Federal and State courts located in
Los
Angeles, California, hereby agree that service of process on any party may
be
effected by certified mail, return receipt requested, postage prepaid, and
hereby waive any objection which they may have based on improper venue or
forum
non conveniens to the conduct of any such suit or action in such court. The
provisions of this Paragraph shall survive any expiration or termination
of this
Agreement.
AUTHORIZED
SIGNATURES
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AMS
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Authorized
Signature - Ironclad Performance Wear
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Authorized
Signature - Advantage Media Services, Inc.
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Corporation
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Print
Name - Ironclad Performance Wear Corporation
|
Print
Name - Advantage Media Services, Inc.
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| Date: |
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Date: |
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Advantage
Media Services, Inc.
00000
Xxxxxxxx Xxxxxx Xxxxx, #0 0 Xxxxxxxx, XX 00000
Phone:
661/000-0000 0 Fax: 661/000-0000
xxx.xxxxxxxxxxxxxx.xxx
