Source 1 Fulfillment
000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Phone 000-000-0000
Fax 000-000-0000
xxx.xxxxxx0xxxxxxxxxxx.xxx
Fulfillment Services Agreement Between
Essentially Yours Industries, Inc. And Source 1
Fulfillment & Distribution
This Agreement is being made and entered into as of this April 14th, 2005
by and between Source 1 Fulfillment having an office at 000 Xxxxxxx Xxxx,
Xxxxxxxx XX 00000 (hereafter "SOURCE ONE") and Essentially Yours Industries,
Inc.(hereafter "EYI") having an office at Xxxxx 000, 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxx
Xxxxxx 00000.
SOURCE ONE is engaged in the business of providing 3rd party logistical
services including warehousing (storage) and fulfillment (distribution
of "materials" and/or "merchandise" on behalf of SOURCE ONE customers.
EYI markets, promotes, sells and wishes SOURCE ONE to distribute "materials"
and/or "merchandise" and desires to enter into a service agreement with
SOURCE ONE to provide selected 3rd party logistical services as specified
below: Both parties hereby agree:
(1) "Materials and "Merchandise" shall be defined as assets owned by EYI
to be warehoused by SOURCE ONE for the purpose of re-distribution of those
assets as directed by EYI. EYI agrees to pay SOURCE ONE fees for the
services provided as noted in Schedule "A".
(A) Inbound shipments: SOURCE ONE will schedule and receive shipments of
EYI material based on an advance notice as supplied by EYI to SOURCE ONE.
Upon arrival of shipments SOURCE ONE will receive and process the material
in accordance with EYI instructions. SOURCE ONE will provide inventory
counts to include any discrepancies as noted immediately to EYI for
their account. SOURCE ONE may refuse shipments because of infestation,
contamination or damage to goods that might cause a liability to SOURCE ONE
premises or inventories. SOURCE ONE will immediately notify EYI of any
refusal and has no liability for any demurrage, detention, transportation
or other charges by virtue of such refusal. Source 1 will maintain an FDA
registration for the purpose of receiving FDA controlled goods from EYI'S
product manufacturers. Any costs associated with the receipt of these goods
from countries outside the United States will be xxxxx by EYI. These fees
would include, but not be limited to, custom clearance, duties, taxes,
broker's fees or fees imposed by the FDA to secure the goods. EYI will
ensure that all goods shipped from countries outside the United States
meet all applicable FDA and other government agency requirements so as not
to preclude their importation in to the United States. Source 1 assumes no
liability for wrongly identified merchandise or merchandise not meeting
applicable regulations for importation in to the United States.
(B) Warehousing: SOURCE ONE will warehouse merchandise and material on
behalf of EYI in secure locations in their facility. Goods are subject
to storage fees as noted in Schedule "A". SOURCE ONE will regularly
conduct counts of all merchandise held to provide an inventory accuracy
of 99.5%. SOURCE ONE will maintain an industry average rate of inventory
shrinkage at 2% or below due to possible concealed shortage or damage and
instances of accidental errors or damage.
(C) Fulfillment: Upon receipt of inventory into the warehouse and database
SOURCE ONE will provide fulfillment services to EYI in order to re-distribute
EYI material to residential (consumer) and bulk (retail, catalog) domestic
and international customers. Fees for this service are listed in
Schedule "A".
Residential consumer orders: SOURCE ONE will receive shipment requests
manually or electronically from EYI or its agents for orders to be
pulled picked and packed. All orders will be shipped within 24 hours
of receipt.
Bulk, retail and catalog orders: SOURCE ONE will receive shipment
requests either manually or electronically for EYI or it's agents for
orders to be processed in bulk (master carton) configurations that
may be palletized or loose loaded for shipment to Retail or Catalog
resellers. Bulk orders may require re-labeling, kitting, assembly,
repackaging and adherence to Vendor Compliance requirements depending
upon the policy of the recipient. Vendor compliance requirements
that may be required are to be provided by EYI or its agents prior
to shipment of Bulk orders. SOURCE ONE will ship all bulk order
requests as required by the customer no later than 72 hours after
receipt of order or as required by a predetermined ship date.
(D) Assembly: SOURCE ONE will provide assembly services to meet
all clients' business objectives. Assembly will be on an as needed
basis at a price based upon the completion of a "scope of services
review". Assembly services include, but are not limited to;
repackaging, kit assembly, re-boxing and other various activities
that add value and increase sales potential. All assembly pricing
will be established upon completion of a "scope of service" review.
E) Returns: SOURCE ONE will provide returns processing services. Fees
for this service are listed in Schedule "A".
(2) Payment Terms: SOURCE ONE will provide weekly invoices
listing all activity for the week. Weekly invoices are due and
payable in full 30 days after receipt of the invoices. Past due
balances are subject to a 1.5% per month finance charge. Weekly
inventory reports will be provided weekly free of charge.
(3) Advertising and Trademarks: Without prior written
permission of both parties, neither party shall advertise or otherwise
represent that it is (or has been) in any way associated or affiliated
with the other and shall not make any use whatsoever of the corporate
name, trade names, service marks or trademarks of the other. However,
SOURCE ONE may advertise the fact that EYI is a valued customer of
SOURCE ONE and EYI may advertise that SOURCE ONE is their fulfillment
service provider of choice.
(4) Collection of Fees: In the event legal action is
necessary to collect for services performed EYI agrees to pay SOURCE
ONE for all reasonable costs of collection, including court costs and
attorney fees incurred. EYI shall be entitled to an award of reasonable
costs of collection costs actually incurred if EYI prevails in any legal
action to enforce SOURCE ONE obligations as outlined in the Agreement.
(5) Term: This agreement shall be effective from the date
first written above and shall continue for an initial period of twelve
(12) months and continuing thereafter for additional terms of one year
unless terminated hereafter provided.
(6) Termination: Either party may terminate this agreement
with or without cause at any time prior to the expiration of either
the initial term or any renewal term by giving the other party at
least sixty (60) days written notice of the intent to do so.
(7) Confidentiality: SOURCE ONE acknowledges that in the
performance of its responsibilities hereunder, it will have access
to confidential information and records including, but not limited to,
marketing materials, products and customer information of the Company
(the "Confidential Information"). During and after the Term of this
Agreement, SOURCE ONE shall not, directly or indirectly, disclose
such Confidential Information to any person or use any such
Confidential Information,except:
a) as required in the course of performing such services
and then only to staff of the Company on a need-to-know basis, or
b) with the prior written consent of the Company;
and all Confidential Information which SOURCE ONE shall prepare
or use or come in contact with shall be and remain the Company'
sole property and shall not be used by SOURCE ONE for its own use
without its prior written consent, except as required in the normal
course of performing services under this Agreement.
c) SOURCE ONE agrees to return to the Company all the
Confidential Information provided by the Company and any copies
of such material in its possession forthwith upon demand.
d) In the event of the breach of covenants set out in
this Agreement, SOURCE ONE:
a) Acknowledges SOURCE ONE to prevent further breaches; and
b) SOURCE ONE shall be liable for liquidated damages for such
breach, without restricting any other claims or remedies that
may be available at law or equity against SOURCE ONE.
(8) Applicable Law: This agreement shall be governed
by and construed to be in accordance with the internal laws of
the State of Pennsylvania, and the parties herby submit to
jurisdiction and venue in the United States Federal District
Court for the State of Pennsylvania, Philadelphia Division,
or the Courts of Bucks County,
Pennsylvania.
(9) Warranties/Damages: SOURCE ONE shall not be
liable for delays or losses incurred due to acts of God, riot,
civil unrest, and other similar events not controlled by
SOURCE ONE. In addition, SOURCE ONE will not be liable for
consequential damages sustained due to services rendered under
this agreement.
(10) Covenants: SOURCE ONE covenants to EYI as follows:
i. To carry out the services performed on behalf of EYI with
due diligence and in the best interests of EYI;
ii. To exercise all reasonable effort to provide the services
to EYI on a timely basis and to perform the services in accordance
with good business practice;
iii. To comply with all lawful and reasonable directions and
instructions of EYI;
iv. The services shall be performed in a competent and
diligent manner by SOURCE ONE using all the resources that
SOURCE ONE deems necessary to perform duties.
(11) Referral Commission: Any client that EYI brings to SOURCE
ONE or that is introduced by EYI shall entitle EYI to a minimum
10% commission of all handling fees that SOURCE ONE shall charge
to that client for the duration of their contract. There will
be no commission paid on actual freight costs. EYI will provide
in writing a list of clients that they shall introduce.
IN WITNESS WHEREOF, The parties have reviewed the language
contained herein and has caused this Agreement to be executed
as of this day and year first written above. The signature below
is of a duly authorized officer and indicates acceptance of this
Agreement as written.
For: Essentially Yours Industries, Inc.
/s/ Xxxx X'Xxxxx
Signature
Date April 19, 2005
Title Chief Operating Officer
For: Source 1 Fulfillment and Distribution
/s/ Xxxxxx Xxxxxxx
Signature
Date April 21, 2005
Title Vice-President
Schedule "A"
Handling Fees
Essentially Yours, Inc.
Fulfillment - Pick and Pack (Consumer Orders)
Order Processing (includes the 1st three (3) items picked)
$2.50 per order
Pick & Pack (each additional item picked and packed on same order)
$0.25 per item
Additional Inserts (literature, etc) (Inserts are defined as
a pre-stapled package or single literature page)
$0.15 per insert
Products such as Prosoteine which will be packaged in its
own display box along with other products, including anniversary
specials, will be pre-assembled at the current prevailing labor rate
of $15.00 per man hour used. After assembly these products will
be considered one SKU and shipped as a single item. All prepackaged
single SKU items, regardless of number of products, will be considered
one item i.e. Kick Start and Triple Play.
NOTE: The above pick and
pack fulfillment prices are based on the following:
* Backordered items, if shipped separately, will be treated as a new
order and subject to a new order processing charge.
* International Orders will be assessed a $2.00 surcharge per order
for preparation of export documentation.
Fulfillment - Full Carton Consumer/Distributor Orders)
Each Full Carton Shipped (Includes order processing)
$2.00 per carton
NOTE: The above full carton fulfillment prices are based
on the following:
* Cartons shipped will be full cartons and not opened for the
insertion of additional product.
* International orders will be assessed a $2.00 per order
surcharge for preparation of export documentation.
* This fee will not apply to full or partial pallet loads.
Storage
Per pallet per week
$2.00
For the purposes of storage, a pallet is considered to be
48' x 42' x 48' high with one sku per pallet. Pallet storage
begins accruing from the first day of receipt and thereafter
is billed at the rate of $2.00 per pallet at the end of each
week for the total number of pallet positions occupied.
Receiving, Put-Away
Merchandise received on Pallets
FREE
Manual unloading of containers of unpalletized merchandise
$275.00 per container
Plus $5.00 for each Source 1 pallet supplied
Receipt of loose product from UPS, FedEx, Etc. FREE
Minimum Charge applicable per receipt FREE
Note: Merchandise not in vendor pack cartons, or loose,
bulky, or extremely heavy merchandise is not covered.
Shipping Palletized Merchandise (Catalog & Retail Orders)
Shipping full pallets of one item per pallet This applies to
merchandise that is received and shipped on pallets without
having to be handled. In this event no carton charge will apply.
$7.00 per pallet
Building pallets of various items to be combined to one
consignee requiring Source 1 to manually pick and stack for
shipment
$0.25 per carton
Stretch-wrapping pallet prior to shipping (if required)
$1.50 per pallet
Pallets supplied by Source 1 for Shipping (if required)
$5.00 per pallet
Returns Processing
Source 1 will receive client returns for processing. Damage
product will be held for client's disposition. Sellable product
will be returned to active inventory providing packaging is in
sellable condition.
Returns (includes, receipt, inspection and disposition)
$2.00 per order returned
Note: If client desires sellable product to be repackaged the
cost will be determined upon a review of the requirements.
Automation Fees
Automation TBD upon review of requirements
Accessorial Charges
Labeling FREE* (address label only) For
any special label requirements, $0.10 cents per label
Packaging Materials
FREE for pick and pack consumer orders. Source 1 will provide
a shippable carton or padded (bubble) envelope not to exceed
12" x 12" x 12" for pick and pack items. One carton or padded
bag per order. Each additional carton needed to complete an
order will be charged at actual cost. Special packaging if
required must be supplied by the client. Examples of special
packaging include printed or custom sized boxes, shipping
tubes or special inner packaging, packaging required for
kitting pre-packs or cartons larger than the size stipulated
above.
Freight Charges
Client will specify their preferred method of shipping. For
UPS, FedEx or DHL client will supply Source 1 with their
account numbers or set up new accounts with Source 1 as the
shipping address and the client as the billing address.
UPS, FedEx and DHL weekly pickup charges will be billed
to client on a pro-rata basis.
For USPS orders Source 1 will supply the proper postage
and xxxx client for the actual charges plus the weekly
USPS pickup charge of $12.00 per week.
Inventory
Source 1 will provide one (1) annual inventory to client
FREE. All other inventories required by the client will
be charged at the rate of $15.00 per man hour.
Minimum Monthly Fees FREE
Schedule "A" Service Fees Agreed To:
Essentially Yours, Inc:
Name: /s/ Xxx Xxxxxxxx Title: President Date: April 21, 2005
Source 1 Fulfillment:
Name: /s/ Xxxxxx Xxxxxxx Title: Vice President Date: April 22, 2005
