Professional Marketing Associates Fulfillment Services Agreement
Professional
Marketing Associates
The
Fulfillment Services Agreement ("Agreement"), signed on this 3rd day of
March, 2006 (the "Effective Date") is between Xxxx Professional Marketing,
Inc.,
an Arizona corporation dba Professional Marketing Associates ("PMA") and
AmerElite Solutions, Inc., a Nevada corporation ("Client").
WHEREAS,
PMA has the capability to provide certain order entry and fulfillment services
for the Client's direct response offerings, as set forth in Exhibit A
hereto.
WHEREAS,
the Client's use of PMA order entry and fulfillment services shall be under
the
terms and conditions set forth in this Agreement.
Therefore,
PMA and the Client agree as follows:
1.
Merchandise ownership
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A.
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For
the purposes of this Agreement, "Merchandise" means all products
provided
by the Client for sale or delivery to Client's customers pursuant
to this
Agreement. The Client shall retain ownership of all Merchandise covered
by
this Agreement and risk of loss at all times. Legal title to the
Merchandise remains with the Client until the Merchandise is shipped
for
delivery to the Client's customer.
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B.
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PMA
makes no claim of ownership of the Merchandise and shall act only
as the
Client's independent contractor for the purposes of order entry,
order
processing, warehousing, distribution, and customer service for
Merchandise.
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C.
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Client
orders for the merchandise are with the Client. The Client is the
seller
of the merchandise.
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2.
Order entry and processing
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A.
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PMA
shall accept and process customer orders for Merchandise received
by all
media designated by the Client.
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B.
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For
each customer order taken, PMA shall enter all or any part of the
following information into its information systems: customer name,
address, city, state, zip code, telephone number, description and
quantity
of merchandise ordered, price, method of payment, advertising source
codes, shipping instructions, and Client-requested
messages.
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C.
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Other
than mail orders, orders received from Client and its affiliates
such as
telemarketing company, web hosting company, etc. shall come in PMA
standard file layout. Should such orders come in a non-compliant
format,
PMA may charge a reasonable fee for translation, re-formatting,
or
re-entry.
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D.
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Except
as provided in Section 2E, PMA shall promptly process all qualified
requests and use its best efforts to cause the order to be shipped
to the
customer within three (3) business days after receipt of the
order.
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E.
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The
Client shall provide sufficient advance notice of all media promotions
to
enable PMA to implement an order fulfillment program appropriate
for the
Client's projected response
forecast.
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| F. |
PMA
agrees to use any software provided by vendors to accomplish the
process
of charging orders. If the Client's merchant processor requires special
software or software not available to PMA at no cost, the Client
shall be
responsible for its purchase.
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3.
Sales price of merchandise
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A.
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For
all orders processed pursuant to this Agreement, PMA shall charge
the
Client's customers the Client's designated unit price, plus applicable
sales and use taxes and other charges designated by the
Client.
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B.
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The
Client shall notify PMA in
writing via U.S. Mail and electronic mail of any change
in the
unit price at least two (2) business days in advance of the date
the price
change takes effect. Price changes may include quantity discounts,
promotion and advertised specials, coupons, rebates, or any other
change
to the unit price designated by the
Client.
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4.
Sales and use taxes
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A.
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Since
title to the merchandise remains with the Client at all times, the
Client
is liable and responsible to remit all sales and use taxes to the
appropriate taxing authorities. PMA assumes no liability for payment
of
sales and use tax.
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B.
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PMA
shall charge the Client's customers for sales and use taxes as directed
in
writing by the Client and furnish the Client with monthly reports
stating
the taxable revenues, taxes collected, and tax rates effective for
each
jurisdiction for which taxes must be
paid.
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C.
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PMA
assumes no responsibility for determining whether sales of the Client's
merchandise are taxable in a given jurisdiction, or that the rate
or
method of calculating any such taxes is correct. PMA agrees only
to use
reasonable care and skill in calculating and collecting taxes due
based on
the rates and methods supplied by
the Client.
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D.
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The
Client shall indemnify, defend, and hold harmless PMA and its
shareholders, officers, directors, and employees from and against
all
claims, suits, or liabilities and expenses, including reasonable
legal
fees, for the Client's failure to remit to the appropriate authorities
any
sales or use taxes claimed to be due and owing by reason of the Client's
sale of merchandise to its customers; provided that PMA has fulfilled
its
obligation to provide standard sales tax reports as requested by
the
Client.
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5.
Processing payments
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A.
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PMA
shall process payments considered acceptable. A payment is considered
acceptable if it is for the full amount of the sale, and in cash
or by a
designated credit card. Designated credit cards include Visa, MasterCard,
Discover, and American Express. The Client shall designate in writing
a
maximum permitted amount or percentage of underpayment which is considered
acceptable to the Client, and for which an order may be shipped.
This
allowance is not a discount and applies only to those transactions
in
which the customer fails to remit a correct payment to
PMA.
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B.
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If
PMA shall receive mail including cash, checks, money orders, or credit
card payments, the receipt of such payments shall be promptly reported
to
Client. PMA shall promptly deposit all checks and money orders it
receives
into a local bank account (Bank of America, Xxxxx Fargo, or Bank
One), if
requested by Client. Otherwise, such remittances shall be mailed
to
Client.
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C.
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PMA
shall process refunds and credits for returned merchandise pursuant
to the
Client's written policies and applicable federal and state
regulations.
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D.
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PMA
is not responsible for any payments that are lost by carriers in
transit
to/from Client.
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6.
Delivery
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A.
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PMA
shall ship Merchandise to the customers by United Parcel Service,
the
United States Post
Office, or equivalent delivery service consistent with the
Client's
requirements for shipping and delivery of merchandise. PMA is not
responsible for any packages that are lost in transit after leaving
its
facilities.
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7. Customer
services
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A.
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PMA
shall provide trained representatives to respond to mail or other
inquires
by the Client's customers for merchandise information, order status,
order
changes, cancellations, returns, or billing. problems. Client shall
provide a set of policies and procedures for responding to such
inquires.
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B.
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PMA
shall send back-order notices and process customer return cards in
accordance with Client requests and applicable federal, state, and
local
laws. It shall also respond to customer complaints, process rejected
credit card charges, and issue refunds or merchandise
credits.
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C.
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PMA
shall issue appropriate UPS call tags, request proof of delivery,
and
process all necessary tracers and claims for non-delivery or damage
on
behalf of the Client, PMA shall provide Client with proof of shipments
but
is not responsible in any way for the results of credit card chargebacks,
nor any fees imposed by merchant banks. Client is responsible for
vendor
compliance guidelines.
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8.
Returns
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A.
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PMA
shall instruct customers on the appropriate procedure for returning
merchandise and inspect all returned merchandise. PMA shall inspect
and
repackage all undamaged or unused merchandise and return it to inventory
for resale. PMA shall repackage all damaged or unsalvageable merchandise,
and process such merchandise in any manner designated by the Client
at the
Client's expense.
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9.
Operating reports
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A.
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PMA
shall provide the Client with standard system reports on a regular
basis
for all services provided pursuant to this Agreement. Standard system
reports include a compilation of customer order information and monthly
sales and tax reports upon written request from the
Client.
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B.
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If
special
reports not
provided as part of the standard reporting system are required, the
Client
shall pay PMA for any programming expenses incurred. PMA shall provide
the
Client with a written estimate of expected programming charges and
obtain
written authorization from the Client for such modifications before
proceeding with the programming development of special
reports.
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10.
Compensation and payment
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A.
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The
Client agrees to pay PMA the rates prescribed in the Services Fees
as set
forth in Exhibit "A" attached hereto and incorporated herein. If
the
Client requires other services not specifically defined in this agreement,
the compensation to PMA shall be the hourly rate prescribed in the
Service
Fees.
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B.
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If
in the event the Client temporarily ceases marketing the product
and
communicates such plans in advance in writing to PMA, then PMA shall
waive
any minimum fee beginning with the first Monday of the next calendar
month
until the termination of this Agreement. During any period in which
the
minimum fee is waived, storage charges will be calculated at twice
the
normal rate. A $15/day processing fee will be applied on any days
in which
PMA processes orders during a period where the minimum fee is
waived.
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C.
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If
the Client then proceeds to market the product again during the term
of
the Agreement, the minimum charge shall again commence beginning
on the
first day of the calendar month the marketing and/or selling begins,
and
shall continue until the termination of the
Agreement.
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D.
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Any
and all financial arrangements not covered in this contract must
be agreed
upon, signed by each party, and attached to this
contract.
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E.
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The
undersigned representative of Client, being an Officer of the Company,
agrees to personally guarantee payment of any amount owed to PMA
upon
termination of contract.
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11. Compliance
with laws
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A.
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The
Client shall comply with all applicable laws, regulations, and
requirements of the Federal Trade Commission, the Food and Drug
Administration. and any other governmental or quasi-governmental
agency
that might have jurisdiction over the Client's Merchandise or sales
transactions. The Client shall monitor compliance under such laws,
regulations, and requirements. and shall promptly notify P.M.A. of
any
special compliance issues raised by the offer or sale of the Client's
Merchandise or sales or promotional activities in a particular
state.
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12.
Indemnification
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A.
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The
Client shall indemnify and hold harmless PMA, its shareholders, officers,
directors, and employees from and against all claims, damages, losses
and
expenses, including reasonable legal fees and costs of suit, arising
out
of or relating to any defects in the Merchandise or from the Client's
negligent or culpable acts or
omissions.
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13.
Insurance
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A.
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The
Client shall provide, at its own expense, all necessary insurance
for
product damage loss through fire or other casualty while the merchandise
is in the custody of PMA, or in transit to or from any
location.
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14.
Confidentiality
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A.
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Material
or information which the Client gives or divulges to PMA or which
comes
into the possession or knowledge of PMA and which relates to the
Client
and its business operations, such as financial information, marketing
data, customer lists, and pricing policies is confidential and
proprietary. PMA shall hold this information or material in confidence
and
shall not reveal the information or material without the consent
of the
Client. On termination of this Agreement, PMA shall immediately deliver
this information or material to the Client on request, if all invoices
and
outstanding debts to PMA have been
paid.
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15.
Programming ownership
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A.
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PMA
is the exclusive owner of all internally-designed or developed computer
programming utilized for processing, tracking, fulfilling, analyzing,
or
reporting orders for the Client's merchandise, The Client shall not,
directly or indirectly, divulge, disclose, or communicate to any
other
person or company who is not a party to this Agreement information
concerning programming or systems designed or utilized by
PMA.
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16.
Audit and inventory
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A.
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Upon
reasonable advance written notice and during normal business hours,
the
Client or the Client's authorized representatives may inspect, audit,
and
copy excerpts from books, records, contracts, and data processing
procedures created or maintained by PMA that relate to the reconciliation
of invoices to the Client and to this Agreement. This audit or inspection
shall take place at the offices of PMA or such other place as the
parties
mutually agree. The Client shall pay all direct and indirect costs
of any
such inspection or audit, except the salaries of PMA employees and
those
costs reasonably incurred by PMA in cooperating with such inspection
or
audit.
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B.
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On
reasonable advance notice from the Client, PMA shall perform a physical
inventory of the Client's merchandise held at
PMA's facilities at reasonable times during normal business
hours.
The Client shall compensate PMA as prescribed in the Service Fees
section
of this Agreement for all costs incurred in conducting the physical
inventory.
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C.
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PMA
will take reasonable and prudent precautions to preserve and protect
Client's property, including all property that is returned by buyers.
If
Client requires special handling or protection of its Merchandise,
Client
agrees to compensate PMA for any extra costs
incurred.
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D.
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Provided
that PMA takes reasonable precautions, PMA shall not be responsible
or
liable for, and Client agrees to hold PMA harmless from property
losses or
shrinkage under the acceptable rate of 1.25% of the greater of inventory
value or annual shipments.
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E.
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PMA
is not responsible for any shrinkage incurred prior to receipt by
PMA or
any hidden shrinkage or shortage not visibly apparent at the time
of
receipt.
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17. Client
payments and reserve
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A.
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At
all times during the term of this Agreement, the Client shall provide
PMA
with sufficient funds to cover all services rendered under this contract
and all delivery service shipping costs. It is the Client's responsibility
to monitor and maintain such reserve. Should such reserve be fully
utilized, PMA reserves the right to stop services until Client provides
sufficient reserve. Any amounts due to PMA are subject to interest
accruing at a rate of 1 1/2% per
month.
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B.
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Any
excess reserve upon termination of this Agreement will be promptly
returned to Client.
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18.
Return of merchandise to the Company
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A.
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PMA
shall, within thirty (30) days after termination of this Agreement,
deliver all the remaining Merchandise entrusted to it by the Company
to a
location specified by the Client on a freight-collect basis. The
Client
shall also have the option to arrange for the delivery of the Merchandise
themselves.
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B.
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PMA
assumes no responsibility for any perishable or date-sensitive merchandise
remaining in its facility after the termination of this Agreement.
Absent
other instructions from the Client, PMA may, within thirty (30) days
after
the Client ceases to market any merchandise covered by this Agreement,
charge up to twice the normal storage fees until the products are
dispersed to their destination by the
Client.
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C.
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PMA
shall charge the Client the hourly rates prescribed in the Service
Fees
section of this Agreement to cover the direct cost of labor and
administrative and systems support services for the relocation of
merchandise or the return of merchandise to the
Client.
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19.
Default, termination, and renewal
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A.
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Either
PMA or the Client may terminate this Agreement or suspend its services
under this Agreement, or both, under any of the following
conditions:
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B.
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Client
fails to pay any sum due to PMA within five (5) business days after
receiving written notice that payment is past
due.
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C.
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Either
party breaches any other obligations under this Agreement, and fails
to
remedy such breach within thirty (30) days after receiving a written
notice from the other party specifying the nature of the
breach.
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D.
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Either
party files a petition in bankruptcy, is declared bankrupt or insolvent,
makes any assignment for the benefit of creditors, or is placed in
trustee
or receivership.
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E.
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This
Agreement shall be renewed automatically at the end of each term
at the
rates than prevailing for PMA's services, unless either party gives
written notice to the other of its intent not to renew at least thirty
(30) days prior to the end of each
term.
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F.
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If
Client owes money to PMA upon default or termination, Client must
pay all
charges due PMA, including interest, before PMA will release product
to
Client. Should Client not pay these charges within 30 days of default
or
termination, PMA has the right to liquidate Client's products in
any
manner that PMA chooses. Proceeds will be used to pay PMA's balance
due.
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20.
Force majeure
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A.
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Either
party's failure to perform any of its obligations under this Agreement,
except its payment obligations, is excused due to any cause or event
beyond the parties' reasonable control including, without limitation,
strikes, lockouts or other labor disputes, acts of God, fire, other
casualty, civil insurrections, actions, or orders of any governmental
or
other lawful authority or similar
events.
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21.
Assignment
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A.
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Neither
PMA nor the Client may assign its interests in this Agreement without
the
prior written consent of the other party to this Agreement. Such
consent
shall not be unreasonably withheld.
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22.
Arbitration
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A.
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Any
dispute or claim arising out of or relating to this Agreement, or
the
performance of any obligations created or imposed by this Agreement,
shall
be resolved by arbitration before the American Arbitration Association,
through its office in Phoenix, Arizona. A single arbitrator shall
be
selected, and all proceedings shall be conducted according to the
American
Arbitration Association's Commercial Arbitration Rules. The arbitrator's
decision and award shall be final and binding, and it shall have
the force
and effect of a judgment when filed with any court of competent
jurisdiction.
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B.
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The
cost of the arbitration procedure shall be borne by the losing party
or,
if the decision is not clearly in favor of one party or the other,
then
the costs shall be borne as determined by such arbitration
procedure.
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C.
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The
arbitration procedure provided herein shall be the sole and exclusive
remedy to resolve any controversy or dispute between the parties
to this
Agreement, and the proper venue for such arbitration proceeding and
any
legal action to enforce such arbitration award shall be Maricopa
County,
Arizona. The parties to this Agreement hereby expressly consent to
the
jurisdiction and venue of Maricopa County Superior
Court.
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23.
Attorneys' fees
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A.
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If
any arbitration proceeding or action shall be brought to recover
any
amount due under this Agreement, or for or on account of any breach
of or
to enforce or interpret any of the terms, covenants, or conditions
of this
Agreement, the prevailing party shall be entitled to recover from
the
other party, as part of prevailing party's costs, a reasonable attorneys'
fee, the amount of which shall be fixed by the arbitrators or by
the Court
and shall be made a part of any judgment or award
rendered,
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24. Notice
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A.
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All
notices under this Agreement shall be in writing, shall be effective
when
received, and shall be given by personal service, by facsimile
transmission with suitable proof of receipt, or by certified or registered
mail, return receipt requested, to the addresses set forth below
or at
such other addresses which may be specified in writing to all parties
hereto.
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| Professional Marketing Associates | AmerElite Solutions, Inc. |
| 000 X. Xxxxxxxx Xxxxx | 0000 Xxxxx 00xx Xxx. #000 |
| Xxxxx, XX 00000 | Xxxxxxx, XX 00000 |
| Attn.: Xxxxx Xxxx | Attn.: Xxxxxx Xxxxx |
25. Number
and gender
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A.
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Whenever
the context of this Agreement requires, the singular shall include
the
plural, the masculine shall include the feminine, and personal pronouns
shall include corporations, firms, partnerships, or other forms of
association.
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26. Captions
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A.
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Titles
or captions contained in this Agreement are inserted only as a matter
of
convenience and for reference, and in no way define, limit, extend,
or
describe the scope of this Agreement or the intent of any of its
provisions.
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27. Governing
law and successors
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A.
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This
Agreement, and any dispute, claim, or defense arising out of or relating
to this Agreement, shall be governed and construed in accordance
with the
laws of the State of Arizona. This Agreement shall be binding upon
and
inure to the benefit of the parties, their heirs, legal representatives,
successors and assigns.
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28. Entire
agreement
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A.
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This
instrument contains the entire agreement of the parties, and no
representations, warranties, or inducements
have been made by any of the parties hereto, except as
expressly set forth
herein.
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29. Term
of agreement
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A.
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The
Term of this Agreement shall be for a period of six (6) months commencing
on the Effective Date and shall be renewed automatically at the end
of
each term pursuant to Section 19E.
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IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement
effective as of the Effective Date.
| Xxxx Professional Marketing, Inc. | Client: AmerElite Solutions, Inc. | |
| (dba Professional Marketing Associates) | ||
| By: /s/ Xxxxx Xxxx | By: /s/ Xxxxxx Xxxxx | |
| Xxxxx Xxxx, President | Xxxxxx Xxxxx, President | |
| Date: 3-3-06 | Date: 3/3/06 |
Exhibit
A - Services Listing
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1.
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The
processing cost per order will be $2.50. This includes the following
services:
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A. Receive
and stock merchandise
B. Receive
orders via batched electronic transfer from telemarketer and
process
C. Open,
edit, and enter data for all mail orders paid via money orders or
checks
D. Deposit
Client funds to a local bank (Xxxxx Fargo, Bank of America, Bank One) or mail
to
Client
E. Process
credit card orders via the Client's merchant processing center
F. Maintain
customer database and produce shipping labels
G. Insert
pre-printed return forms and all bounce back materials
H. Pick,
pack, and ship pre-assembled merchandise
I.
Tape
two
boxes together as necessary
J.
Provide PMA standard reports
K. Receive
return packages
L.
Inspect returned merchandise
M. Issue
customer credits
N.
Restock undamaged return merchandise
O.
Answer customer service phone calls
P. Communicate
with merchant bank for charges, credits, and inquiries
Q. Reply
to merchant bank in the event of chargebacks
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2.
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This
cost will be lowered to $2.05 for those orders that only contain
one
component (e.g., one container
of night cream with no
inserts).
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3.
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Client
will reimburse costs for packing
material.
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4.
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The
following quantity discounts will
apply:
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A. Orders
500 to 1000 in a week: 5% discount
B. Orders
1,001 to 1,500 in a week: 10% discount
C.
Orders 1,501 and above per week; 20% discount
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5.
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The
one-time setup fee for database and report development, initial product
receipt and setup, and coordination with telemarketer and website
will be
$1,000. This will be reduced to $850 if Client uses Benzaiten Consulting
for their shopping cart. Additionally, Client will reimburse PMA
for costs
of necessary charging software, estimated to be $138 (current pricing
for
a PC Charge license from Go
Software).
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6.
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Processing,
postage, and setup charges are to be paid in advance by the Client
to PMA.
A $2,000 minimum deposit will accompany this
Agreement.
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7.
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Weekly
volume below 200 orders will be assessed a fee equivalent to 200
orders.
This will be waived through June 2,
2006.
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8.
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Additional
charges:
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A. "More
order information" letters: $1.00 plus postage (letter to be
provided)
B. Outbound
communications: $2.00 (outbound customer calls, placing orders for packaging,
etc.)
C.
Phone orders: $2.00
D.
Walk-in orders: $5.00
E.
Backorder management: 50% of processing cost per order
F.
Pallet storage: $25 per pallet per month
G. Shipment
of full pallets: $45 each
H. Programming
expenses (post-setup): $75/hour
I.
Other labor charges not included above: $25/hour
8
