EXHIBIT 10.13
ORDER FULFILLMENT SERVICES AGREEMENT
ORDER FULFILLMENT SERVICES AGREEMENT (this "Agreement") dated as of the
seventeenth day of September 1999, by and between Keystone Fulfillment, Inc.
("Keystone"), a Delaware corporation with a principal place of business located
at 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx, and Fogdog, Inc. ("Fogdog,"), a
California corporation with a principal place of business located at 000
Xxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx.
W I T N E S S E T H:
WHEREAS, Keystone and its affiliates are engaged in the business of direct
response marketing to consumers;
WHEREAS, Fogdog is engaged in the business of the direct marketing of
sporting goods (the "Fogdog Merchandise") and proposes to continue to conduct
for the Term (as defined below) of this Agreement to market Fogdog Merchandise
to consumers through its website(s) (the "Fogdog Business");
WHEREAS, Fogdog proposes that Keystone provide fulfillment and other
services respecting the Fogdog Business; and
WHEREAS, subject to the terms and conditions herein contained, Keystone
desires to provide such services as set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter made by the parties hereto, Fogdog and Keystone agree as follows:
1. Appointment: Acceptance. Subject to the terms and conditions set forth in
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this Agreement, Fogdog hereby appoints Keystone to coordinate and/or
perform the services described herein for the Term. Keystone hereby
accepts such appointment and agrees to coordinate and/or perform such
services as provided herein for the Term.
2. Fulfillment Services. Keystone will provide or coordinate fulfillment
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services to Fogdog in connection with the Fogdog, Business such services
being described, and to be performed in accordance with the Performance
Standards and Statement of Work set forth, in Exhibit C. Fees for these
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services are to be billed to and paid by Fogdog in accordance with the fee
schedule set forth in Exhibit A attached hereto and made a part hereof.
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[*] Except for shipping work performed by third-party carriers,
Keystone shall remain liable for all work it outsources under this
Agreement.
3. Certain Fogdog Obligations. Fogdog will:
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CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
a. pay Keystone per the fee schedule attached as Exhibit A for, and
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reimburse Keystone for all reimbursable expenses as described and at
the rates indicated in Exhibit A which are incurred by Keystone in
connection with, all services performed by Keystone on Fogdog's
behalf;
b. arrange for delivery of Fogdog Merchandise to Keystone's facility, in
accordance with the standard vendor compliance procedures set forth in
Exhibit B attached hereto and made a part hereof, as the same may be
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modified from time to time by the parties;
c. [*]
d. pay for all costs of stationery and packaging and other supplies
required in connection with the Fogdog Business, such items to be
billed by Keystone in accordance with Exhibit A;
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e. arrange and pay for the disposition of any overstocks remaining unsold
at the end of the Term of this Agreement, including payment of all
costs of customs duties, transportation and insurance after the Term
of this Agreement; and
f. provide Keystone on or prior to the execution and delivery of this
Agreement with a duly executed original Pennsylvania resale
certificate and sales tax exemption certificate.
4. Reporting: Invoice; Right to Suspend Services for Nonpayment. [*]
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5. Representations and Warranties.
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a. Each Party represents and warrants to the other: that it has full
power and authority to enter into this Agreement and to undertake its
obligations pursuant hereto; that this Agreement constitutes a valid
and binding agreement of such party, enforceable in accordance with
its terms (except as enforceability may be limited by creditors'
rights laws and equitable remedies); that the execution,
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
delivery and performance of this Agreement do not and will not
conflict with or result in a breach of or constitute a default under
any provision of the charter or by-laws of such party, or give rise to
any default under any material contractual obligation of such party or
violate any provisions of any law, rule, regulation, order, writ,
judgment, injunction, statute, decree, determination or award having
applicability to such party or any of its affiliates or its or their
properties; and that it is duly qualified or licensed in all
jurisdictions wherein the nature of the business conducted by it or
the character or location of its properties makes such qualification
or licensing necessary, except where the failure so to be qualified or
licensed would not, if left unremedied, impair the other party's
ability to perform its respective obligations under this Agreement.
b. Fogdog represents and warrants to Keystone that in the conduct of the
Fogdog Business as it pertains to any and all Fogdog Merchandise, and
other items supplied by Fogdog or one of its vendors, Keystone
handles, comes into contact with, or has possession of: Fogdog is the
absolute owner of all its patents, trademarks, service marks,
trademark and service xxxx applications, trade names, copyrights,
trade secrets and other intellectual property used in its business
and/or to be used in the Fogdog Business, or has, to its knowledge,
and will use its best efforts to continue to have during the Term of
this Agreement, all necessary authority of the corporations,
partnerships and individuals whose products and services will be
offered for sale in the Fogdog Business to use their patents,
trademarks, service marks, trade names, trademark and service xxxx
registrations, copyrights, trade secrets and other intellectual
property for all purposes of conducting the Fogdog Business. Fogdog's
Business, as it pertains to any and all Fogdog Merchandise, and other
items supplied by Fogdog or one of its vendors, Keystone handles,
comes into contact with, or has possession of, as conducted or as
currently proposed to be conducted does not and will not, to Fogdog's
knowledge after due inquiry, cause Fogdog to infringe or violate any
patents, trademarks, service marks, trade names, copyrights, licenses,
trade secrets or other proprietary or intellectual property rights
(including, without limitation, rights of privacy and publicity) of
any other person or entity.
6. Vendor. Fogdog will be the vendor of Fogdog Merchandise to Fogdog Business
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customers. Fogdog will be responsible for any required sales tax
registrations, filings and remittances. Fogdog shall provide Keystone with
a schedule of all jurisdictions for which Keystone is to xxxx Fogdog's
customers for sales and use tax pursuant to section 2(f) of this Agreement.
For each jurisdiction listed, such schedule shall indicate whether the non-
merchandise components (e.g. delivery charges, insurance, etc.) of Fogdog's
customer billing shall be included in the tax base for calculating sales
and use tax. Fogdog shall provide Keystone with a product matrix schedule,
by SKU number and jurisdiction, indicating each jurisdiction in which the
sales price of such SKU number shall be wholly or partially exempt from
sales and use tax. For any SKU number partially exempt from sales and use
tax, the limits of such exemption shall be indicated. All products not
appearing on the product matrix schedule shall be included in the tax base
in all jurisdictions for which Fogdog has requested Keystone to xxxx sales
and use tax. The schedules to be provided by Fogdog in accordance with
this section shall be
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provided to Keystone no later than thirty (30) days prior to the
commencement of order processing pursuant to section 2(a) of this
Agreement. Pursuant to Section 2(f) of this Agreement, Keystone shall xxxx
Fogdog's customers for sales and use taxes for Pennsylvania and such other
jurisdictions appearing on Fogdog's schedule of jurisdictions for which
Keystone is to xxxx Fogdog's customers for sales and use tax. Sales and use
taxes shall be billed at the current rate, as reported by Vertex or such
other third-party national sales tax rate directory as may be used by
Keystone, for the date on which orders to Fogdog's customers are received.
Keystone makes no representations or warranties as to the accuracy of the
information provided by Vertex or any other third-party national sales tax
directory. Keystone shall amend the schedule listing the jurisdictions,
products and/or other amounts billed to Fogdog's customers for which it
bills sales and use taxes within thirty (30) days of receipt of a written
request for an amendment from Fogdog. Keystone shall not be held
responsible for the collection of sales and use taxes that are unpaid by
Fogdog's customers nor for any failure to xxxx the proper sales and use
taxes provided Keystone has complied with the provisions of this section.
7. Compliance with Laws. In performing its obligations under this Agreement,
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each party shall comply with all applicable federal, state and local laws,
rules, regulations and orders.
8. Confidentiality. The parties (including their officers, directors,
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shareholders, affiliates, agents, employees, consultants, other
representatives, successors, and assigns) agree that all confidential or
proprietary information (the "Confidential Information"), including,
without limitation, customer names, addresses and other related data and
pricing, fulfillment and other operational information, received by each as
a result of the project contemplated hereby, shall be maintained in
strictest confidence, shall not be disclosed to anyone other than employees
or agents of the respective parties whose duties require access to such
information, and shall be used solely by the parties to carry out this
Agreement and the transactions contemplated thereby. Keystone specifically
agrees not to use for its own Purposes, or to provide to a third party, any
customer or mailing lists of Fogdog that comes into its possession without
the prior written consent of Fogdog,. The parties further agree that any
public statements made by either party concerning this Agreement or the
transactions contemplated herein, unless required by law, shall require the
prior written approval of the other party. In addition, should either
party be required to disclose the Confidential Information or any part of
it to the Securities and Exchange Commission, the par-ties agree to
cooperate with each to obtain confidential treatment of such information.
9. Effectiveness and Termination.
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a. This Agreement shall be effective as of the date first set forth above
and shall continue in full force and effect through [*] ("the Term"),
unless earlier terminated by either party upon:
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(1) if not cured within [*] following written notice thereof, the
failure of the other party to comply substantially with any
material provision of this Agreement, including but not limited
to:
(a) Section 2 payment obligations and Exhibit A;
(b) Section 4;
(c) Section 5;
(d) Section 12;
(e) Exhibit C: Merchandise Receipt Performance Standards;
(f) Exhibit C: Collate, Printing, Picking, Packing and Shipping
Performance Standards for Regular Orders;
(g) Exhibit C: Inventory Shrinkage; and
(h) Exhibit C: Priority Order Processing.
(2) the commencement of any voluntary or involuntary bankruptcy,
insolvency, reorganization, readjustment of debt, dissolution
(except by way of merger or consolidation), liquidation of debt,
or other insolvency proceeding by or against the other party;
(3) the suspension or termination of the other party's business or
the appointment of a receiver, trustee, or similar officer to
take charge of a substantial part of the other party's assets;
(4) the other party admitting in writing its inability to pay its
debts when due; or
(5) [*] prior written notice given to the other party.
Fogdog will pay all reasonable expenses associated with moving
inventory out of Keystone's facilities should Keystone terminate this
Agreement pursuant to this Section 9.
b. Upon termination of this Agreement, if Fogdog has failed to pay any
undisputed amounts due hereunder, Keystone shall have a lien against
any remaining Fogdog Merchandise until payment by Fogdog of all
undisputed outstanding amounts, subject to the provisions of the
Uniform Commercial Code or other relevant law. Such remedy shall be
cumulative and in addition to any other remedies Keystone may have in
law or equity.
10. Automatic Renewal of Agreement. This Agreement shall be automatically
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renewed for successive [*] periods after the Term (each also a "Term")
unless either party provides the other party with written notice at least
[*] before the end of the then current Term that such party does not want
to renew this Agreement.
11. No-Hire. Each party agrees that, during and for a period of [*]
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after the Term, or, if this Agreement is earlier terminated, then for the
period when the Agreement is in effect and thereafter for a period of [*]
from the date of the Agreement's
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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termination, neither it nor any of its affiliates or associates, directly
or indirectly, will solicit with a view toward hiring any of the current
officers, employees, consultants, or other representatives of the other (as
officer, employee, consultant or otherwise) without obtaining the prior
written consent of the other party.
12. Indemnification; Limitation on Liability [*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[*]
13. Force Majeure; No Consequential Damages. In the event that either party
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shall be unable to perform under this Agreement because of circumstances
constituting a force majeure, including, without limitation, acts of God,
accident, fire, flood, explosion, the elements, strikes, embargo, sabotage,
acts of war or of military authorities, civil disturbances, transportation
stoppages, acts or omissions of carriers, inability to secure fuel,
failures of electrical supply or communications services, acts of computer
hackers, or other causes beyond its control, such party shall not be deemed
to be in breach of this Agreement or liable to the other for failure to
perform hereunder. None of the foregoing, however, shall excuse any
failure of either party to pay money as and when due hereunder. In no case
shall either party be liable to the other for any consequential, incidental
or indirect losses or damages of any kind arising out of or in any way
connected with this Agreement, even if such party has been advised of the
possibility of such losses or damages.
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
14. Binding Effect, No Assignment. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors
and assigns. [*] Any purported assignment or other transfer in violation of
this section shall be null and void.
15. Independent Contractors: No Third-Party Rights. Nothing contained in this
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agreement shall be construed to give either party the power to direct or
control the day-to-day activities of the other. The parties are, and in
all respects of their relationship to one another and their respective
performances hereunder shall be, independent contractors, and neither this
Agreement nor anything herein contained shall be deemed or construed to
constitute the parties as partners, joint venturers, principal and agent,
co-owners or otherwise as participants in a joint or common undertaking.
16. Modification; No Waiver; Severability. No modification or waiver of any
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provision of this Agreement shall be effective unless and only to the
extent expressed in a mutually executed agreement. No failure or delay by
any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege. Should any provision of this Agreement be determined to be
void, invalid or otherwise unenforceable by any court of competent
jurisdiction, such determination shall not affect the remaining provisions
hereof, which shall remain in full force and effect.
17. Governing Law; Jurisdiction. This Agreement shall be governed by and
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construed under the laws of the State of Pennsylvania, without regard to
such state's conflict of laws rules. THE PARTIES HEREBY AGREE TO SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN
THE STATE OF PENNSYLVANIA, AND HEREBY WAIVE ANY OBJECTION BASED ON VENUE OR
FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN AND ANY
RIGHT TO TRIAL BY JURY.
18. Notices. Except as otherwise provided in this Agreement, notices required
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to be given pursuant to this Agreement will be effective upon receipt (or
upon rejection of receipt) when hand-delivered in writing, sent by prepaid
express delivery courier, sent by first class certified mail, return
receipt requested, with postage fully prepaid, or sent by facsimile
followed by a confirmation letter of such delivery method, to the parties
at the respective addresses and numbers below:
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
(a) if to Keystone:
Keystone Fulfillment, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, XX
Attention: Xxxx Xxxxxxxxx
Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Hanover Direct, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
(b) if to Fogdog:
Fogdog, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Director of Logistics
Telephone: 000-000-0000
Facsimile: 650-980-2600
with a copy to:
Fogdog, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxx XxXxxxxx
General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
19. Survival; Injunctive Relief; Remedies Cumulative. The confidentiality and
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no-hire provisions hereof shall survive the expiration or earlier
termination of this Agreement and the consummation or termination of the
transactions contemplated hereby. The parties agree that the remedy at law
for any breach of such provisions would be inadequate; that the injured
party shall be entitled to seek injunctive relief in addition to any other
remedy to which it may be entitled. Notwithstanding the expiration or
earlier termination of this
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Agreement neither party hereto shall be released from any liability or
obligation hereunder (whether in the nature of indemnification or
otherwise) which has already accrued as of the time of such expiration or
termination or which thereafter might accrue in respect of any act or
omission of such party prior to such expiration or termination. The
remedies provided herein are cumulative and not exclusive of any other
remedies that a party may have in law or equity.
20. Entire Agreement; Counterparts. With respect to the matters contemplated
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herein, this Agreement constitutes the entire understanding between the
parties and supersedes all prior oral and written communications,
negotiations, understandings and agreements between such parties in
relation to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute the same agreement.
21. Number and Gender. Whenever appropriate in this Agreement, terms in the
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singular number shall include the plural (and vice versa) and each gender
form shall include all others.
22. Headings. Section headings contained in this Agreement are for reference
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purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
23. Drafting. This Agreement shall be treated as an agreement that was jointly
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drafted by all parties signing it and shall not be read against any
particular drafter of the Agreement or any provision therein.
24. Attorneys' Fees and Litigation Expenses. In the event that any legal
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proceeding concerning the validity, enforcement or interpretation of the
provisions of this Agreement is instituted, the prevailing party in such
proceeding shall be entitled to recover its reasonable attorneys' fees and
other litigation expenses incurred in such proceeding, in addition to any
other relief to which it may be entitled, from the losing party.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
KEYSTONE FULFILLMENT, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Vice President, Marketing
FOGDOG, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxx
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Title: CEO
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Exhibit A
Schedule of Fees
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Orders/month
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
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[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Exhibit B
Standard Vendor Compliance Procedures
Packaging
Vendors are expected to deliver merchandise in prepackaged units exactly as they
are to be sold to the customer. All items require packaging that will protect
them during distribution, storage, handling and shipping. There are four
package formats that are acceptable to Keystone:
Polybags
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Non-fragile items can be packaged in individual, fully vented polybags
labeled with the Fogdog item number. Multiple items of the same item
number may be packed into a master carton. Polybags are appropriate for
small items which will not easily break during handling and for textile
items.
Boxes
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Items may be packaged in a retail box made from kraft board or corrugated
boxes. This may be appropriate for non-fragile items or where there is
sufficient inner protection to prevent damage from shock or vibration. If
the product is exposed, or the item may fall out of the package during
conveyance, a polybag, shrink film or over-box must be used. These items
must be delivered in a master carton.
Protective Packaging
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Items which can easily break must have protection sufficient to withstand
the normal distribution handling and shipping environment.
Ship-Alone Packaging
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Items that are greater than 23 inches in length or weigh more than 30
pounds must be packaged in mailable containers. These items will be sent
directly to the customer and will not be over-boxed.
Master Cartons
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Items less than 23 inches in length or less than 30 pounds should be in
master cartons. The master carton size should not exceed 36"L x 26"W x
20"H, nor exceed 50 pounds. Each master carton must contain only one
Fogdog item number.
Labeling
Individual Unit Label
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Each individual selling unit must have an identification label. The label
must show the Fogdog item number and the country of origin. This does not
necessarily need to be externally marked.
Master Carton Labeling
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Each master carton must have the following information clearly marked or
labeled on the outside of the carton:
. Fogdog
. Fogdog Item Number
. Purchase Order Number
. Color
. Quantity
. Case Number ___ of ____
. Made in:
. Destination
Shipping Requirements
Advance Shipping Notification (ASN)
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All inbound shipments must be scheduled through the Traffic Department
using an ASN. This must be faxed to the Traffic Department at (717) 633-
3202 at least 3 days before shipping. The Traffic Department will return
the form within 24 hours with a Request Number. Questions about ASNs
should be directed to the Traffic Coordinator at (000) 000-0000.
Loading the Truck
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The truck must be loaded by purchase order and then by item number within
that purchase order.
Packing List
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A detailed packing list must accompany each shipment and should be attached
to the last container/pallet loaded in the trailer. There should be one
packing list for each purchase order shipped.
Routing Guide
For inbound shipments arriving at Keystone with collect freight terms, the
carriers shown in this routing guide should be used. Other carriers may be used
if agreed to in writing by Keystone before shipments are originated.
Shipments weighing under 125 pounds:
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Use RPS. Call (000) 000-0000 for instructions or supplies
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Shipments weighing between 125 pounds and 4,999 pounds and occupying less
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than 1/3 of a 48 foot trailer:
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Use the carrier shown in the chart following this section.
Shipments weighing between 5,000 pounds or more and/or occupying more than
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1/3 of a 48 foot trailer:
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Call the Traffic Coordinator at (000) 000-0000 to schedule merchandise
pickup.
Items not complying with the requirements contained in this Exhibit may be
prepped or re-worked by Keystone at the expense of Fogdog at the sole
discretion of Keystone.
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Shipments weighing between 125 pounds and 4,999 pounds and occupying less
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than 1/3 of a 48 foot trailer should be shipped by the carrier shown for
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the origin state in this table:
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State Carrier
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AL Roadway NM Roadway
AR Roadway NV Roadway
AZ Roadway NY Overnite
CA Roadway OH Roadway
CO Roadway OR Roadway
CT Overnite PA Overnite
DC Overnite RI Overnite
DE Overnite SC Overnite
FL Roadway SD Roadway
GA Roadway TN Roadway
IA Roadway TX Roadway
ID Roadway UT Roadway
IL Roadway VA Overnite
IN Roadway VT Roadway
KS Roadway WA Roadway
KY Roadway WI Roadway
LA Roadway WV Overnite
MA Overnite WY Roadway
MD Overnite
ME Overnite
MI Roadway
MN Roadway
MO Roadway
MS Roadway
MT Roadway
NC Overnite
ND Roadway
NE Roadway
NH Overnite
NJ Overnite
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Exhibit C
Keystone Services, Performance Standards, and Statement of Work
OVERALL SCOPE
Fogdog will receive orders via the Internet. Fogdog will authorize credit
cards and transmit orders to Keystone Fulfillment, Inc. (KFI). KFI will
pick, pack and ship the orders. KFI will prepare and send to Fogdog a file
for shipped orders, including delivery-tracking information. Fogdog will
xxxx the credit cards and resolve declines and charge backs from the bank.
KFI will transmit the inventory snapshot and inventory transaction files to
Fogdog at least once per day.
Fogdog will transmit to KFI item numbers, purchase orders and vendor
information. KFI will update Fogdog with an order status file at least
twice per work day (actual frequency to be agreed upon by KFI and Fogdog).
Interfaces and System Setup
Work will begin on September 15, 1999 to develop system interfaces and
setup an account on the KFI system. Programming will be performed by
Fogdog so files sent to KFI comply with the formats contained in Exhibit G
of this agreement for purchase order, item, vendor and order files. KFI
will perform programming so files sent to Fogdog meet the formats contained
in Exhibit G of this agreement for order status and inventory status.
Shipment of products to Fogdog customers will begin no later than October
11, 1999.
Information Set Up
Fogdog will transfer to KFI item, purchase order, and vendor files.
Forecasting
Fogdog will make every attempt to provide a daily forecast for receipts,
shipments, gift box units and gift wrapping units, within [*] of actual
numbers in order for KFI to meet standards. Fogdog will have this forecast
to KFI by 5 PM Eastern Standard Time on each Monday for the week beginning
three weeks later. If actuals fall outside of the [*] KFI will not be
bound to the performance standards contained in this agreement but will do
everything within reason to meet these standards.
If actuals are over [*] of the forecast, the account executive will call
for an operational overview with both KFI and Fogdog representatives. The
purpose of this overview will be to determine the best short-term
operational plan to work out of the backlog situation.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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If actuals fall below [*] of the forecast, Fogdog will pay KFI the
equivalent of the charge for receiving, shipping, gift boxing, and gift
wrapping, [*] of the forecasted orders or units respectively.
Merchandise Receipt
Fogdog's vendors will follow vendor compliance guidelines contained in this
Agreement, including providing KFI with advance shipping notification. KFI
will receive and enter into inventory all items meeting purchase order
requirements and not requiring prep within one business day. KFI will
provide a 10% basic inspection at the piece level for product
identification and count verification.
Receipts requiring sortation into one sku per carton, will be available for
sale 2 business days after arrival at KFI's facility. Multi-sku receipts
with inner packs that will withstand the rigors of material handling within
the warehouse will be available for sale one business day after arrival at
KFI's facility.
For item(s) not meeting purchase order requirements, a problem order manual
log will be generated and contact made to Fogdog to resolve incoming
problems within one business day.
At Fogdog's request, KFI will provide kitting services.
Quality Inspection
Any merchandise requiring additional quality control and/or prep work must
be approved by Fogdog in advance of work performed.
Merchandise Storage
Fogdog's inventory will be stored solely in KFI's Xxxxxx Xxxx facility,
unless Fogdog authorizes Keystone in writing to store Fogdog's inventory
off-site, and will be segregated from other active and reserve Keystone
inventory.
Merchandise will be stored in a clean, climate controlled space that offers
reasonable protection from temperature and water damage and includes
functioning sprinklers. In addition, for items identified by Fogdog as
"high value", a secure storage area with limited access will be used.
Order Origination
Customers will place orders through the Internet. The inventory snapshot
and transaction files will be transmitted once per day by KFI to Fogdog and
will be used to calculate availability at the time of order. Fogdog will
authorize the order, check for frauds, and create a file with the
customer's name, address, product number, and quantity. KFI will initiate
a file transfer to its system at least twice per work day (actual frequency
to be agreed upon by KFI and Fogdog)
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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KFI will, at a frequency to be agreed upon by KFI and Fogdog, but not less
than twice each work day, transmit files to Fogdog to update inventory and
order status information, including cancellations.
COLLATE PRINTING, PICKING, PACKING, AND SHIPPING
Regular Orders
All items available for picking (excluding back orders) are released on a
collate to the distribution center for shipping at the conclusion of the
order run. [*] of all in stock, non-damaged non-problem orders transmitted
to KFI prior to the midday order processing run, up to [*] of the Fogdog
forecast mentioned above, will be shipped on the same day. If less than
[*] of all in stock, non-damaged, non-problem orders transmitted to KFI
prior to the midday order processing run, up to [*] of the Fogdog forecast
mentioned above, are not shipped the same day, KFI will upgrade its
shipping services, and bear the costs of such upgrades, to bring the orders
up to the [*] level as follows: 1) UPS Ground to UPS 3-day select; 2) UPS
3-day select to UPS 2nd day air; 3) UPS 2nd day air to UPS next day air; 4)
USPS parcel post to USPS Priority Mail; 5) USPS Priority Mail to USPS
Express Mail Service. 100% of the orders carried over will be shipped by
the end of the next business day. (During high volume periods, as
determined by Keystone in its sole discretion, Keystone will use reasonable
efforts to implement weekend and evening schedules to maintain this
standard.)
QUALITY ASSURANCE
On a weekly basis, outbound order accuracy and order presentation will be
at minimum [*].
If outbound order accuracy is at or above [*] at the order level for a
given week, Fogdog and KFI will share equally the cost of return postage
and shipping charges for replacement items required to correct the outbound
order accuracy errors. If outbound order accuracy is below [*], the
parties shall share equally the cost of return postage and shipping charges
for replacement items required to correct the first [*] and thereafter KFI
will bear the entire cost of return postage and shipping charges for
replacement items required to correct the outbound order accuracy errors.
Outbound order accuracy is measured by the following criteria: (1) correct
item(s) in the package; (2) presence of gift boxing and/or gift wrapping
per Fogdog instructions; and (3) sufficient dunnage to protect item(s)
during shipping. Order presentation is defined as correct inserts,
labeling and/or other package appearance work per Fogdog instructions.
Distribution
Distribution will receive the collates (packing slips) at the conclusion of
each order run. KFI will pick, pack and ship the order, using a label
bearing Fogdog's name and logo as specified by Fogdog, together with the
return address specified by Fogdog. Products will
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
22
be shipped using Fogdog's designated carrier(s). Orders shipped via UPS
will ship under a Fogdog designated UPS Shipper Number and account. The
completed shipment record and tracking information will be transmitted to
Fogdog via the order status file. Fogdog will xxxx the customer and credit
Fogdog's bank account.
Credit Card Processing and Charge Backs
After the order is shipped, KFI will send the shipment confirmation file to
Fogdog. Fogdog will process the billing of the credit cards.
Returns
Customer returns, including credit card credits, will be processed by
Fogdog at its facility. Items to be returned to inventory will be sent by
Fogdog to KFI and processed as new receipts.
Order Cancellations
Fogdog will cancel orders in its system if the file has not been
transferred to KFI. Once orders have been transferred to KFI, orders can
be canceled before they are released to the Distribution Center. If orders
have progressed beyond the cancellation point, Fogdog can contact the
account executive and reasonable efforts will be made by KFI to manually
track down the orders in the warehouse. KFI will notify Fogdog whether or
not KFI was able to locate and cancel the orders.
Inventory Shrinkage
KFI will be responsible for inventory accuracy at these levels:
. [*] in aggregate as determined by physical inventory
. [*] in aggregate on 12 week cycle counts after adjustments made for
active recounts
If there is shrinkage above these levels, KFI will pay the cost to replace
those goods.
Priority Order Processing
All priority orders, up to a maximum of [*] per day, received by KFI prior
to 3:00 p.m. Eastern Standard Time will be shipped that same day.
Reports
The reports referred to in Exhibit E of this agreement will be available to
Fogdog at daily, weekly and/or monthly frequencies as requested in writing
by Fogdog.
Inventory
KFI will conduct cycle counting of the reserve storage for a complete
turnover every 12 weeks. An annual physical inventory is also available
with two months' written notice.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Return to Vendor and other Inventory Handling
KFI will destock and return to Fogdog, its vendor(s) or other Fogdog
designated parties, as the case may be, any rejected or overstock Fogdog
Merchandise at Fogdog's discretion and at Fogdog's expense.
Keystone Inserts
KFI will not include any inserts relating to KFI in any order without the
prior written consent of Fogdog.
Certain Definitions: "Business day," for all purposes of Keystone
Standards and the Direct Marketing Services Agreement to which this is
attached, shall mean Monday through Friday except any day that is a United
States national holiday.
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Exhibit D
Keystone Account Executive Job Description
Reports To: Vice President Operations of Keystone
SUMMARY
Provides and leverages service to Fogdog for the purpose of meeting
contractual obligations and generating additional business by performing
the following duties.
ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties
may be assigned.
. Develops strong working relationships with companies doing business with
Fogdog.
. Provides required reports for Fogdog as specified in this Agreement.
. Works with companies doing business with Fogdog to identify and
communicate marketing projections related to orders, receipts, returns
or other data that will affect service levels to customer service and
fulfillment management teams.
. Monitors and communicates attainment of contractual performance
standards to Fogdog's customer service and fulfillment operations,
making recommendations for improvements as necessary.
. Provides Fogdog with information and advice on the best methods to use
to improve throughput and cost.
. Works with all operating divisions to set up new Fogdog accounts.
. Schedules meetings and tours for companies doing or potentially doing
business with Fogdog.
. Conducts off-line or on-line research to resolve customer problems.
. Assures compliance with pertinent laws and regulations.
. Position will require hours outside of normal schedule and may involve
periodic overnight travel.
. Insures that staff has required resources and equipment to perform their
duties.
SUPERVISORY RESPONSIBILITIES: The Account Executive will directly
supervise 1 to 2 Assistant Account Executives. The Account Executive will
carry out supervisory responsibilities in accordance with Keystone's
policies and applicable laws.
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Responsibilities include interviewing, hiring, and training employees;
planning, assigning and directing work; appraising performance; rewarding
and disciplining employees; addressing complaints and resolving problems.
QUALIFICATIONS: To perform this job successfully, the Account Executive
must be able to perform each essential duty satisfactorily. The
requirements listed below are representative of the knowledge, skill,
and/or ability required. Reasonable accommodations may be made to enable
individuals with disabilities to perform the essential functions.
EDUCATION and/or EXPERIENCE: Associate's Degree (A.A.) or equivalent from
two-year college or technical school; or six months to one year related
experience and/or training; or equivalent combination of education and
experience.
LANGUAGE SKILLS: Ability to read, analyze, and interpret general business
periodicals, professional journals, technical procedures, or governmental
regulations. Ability to write reports, business correspondence and
procedure manuals. Ability to effectively present information and respond
to questions from groups of managers, Fogdog representatives, customers,
and the general public.
MATHEMATICAL SKILLS: Ability to add, subtract, multiply, and divide in all
units of measure, using whole numbers, common fractions, and decimals.
Ability to compute rate, ratio, and percentages and to draw and interpret
bar graphs.
REASONING ABILITY: Ability to define problems, collect data, establish
facts, and draw valid conclusions. Ability to interpret an extensive
variety of technical instructions in mathematical or diagram form and deal
with several abstract and concrete variables. Ability to manage multiple
projects and priorities.
COMPUTER KNOWLEDGE: Experience with Microsoft Office Suite products
including Word, Exchange and Excel. Ability to create business
correspondence in Word and Exchange. Ability to create spreadsheets in
Excel using simple calculations and equations. Knowledge of PowerPoint is
a plus. Experience in MACS, Xxxxxx, PowerPoint or other software common to
Keystone/Hanover Direct is a plus.
PHYSICAL DEMANDS: The physical demands described here are representative
of those that must be met by the Account Executive to successfully perform
the essential functions of this job. Reasonable accommodations may be made
to enable individuals with disabilities to perform the essential functions.
While performing the duties of this job, the Account Executive is regularly
required to sit and talk and/or listen. The Account Executive frequently
is required to stand; use hands to finger, handle, or feel; and reach with
hands and arms. The Account Executive is occasionally required to walk and
stoop, kneel, xxxxxx or crawl. The Account Executive must occasionally
lift and/or move up to 25 pounds.
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Exhibit E
Standard System Reporting Listing
Actual Offer Page Analysis
--------------------------
Daily Demand
------------
Daily Return
------------
Inventory Value Report
----------------------
Items by Location
-----------------
Key History Analysis
--------------------
Key History II
--------------
Order Fill Rate Analysis
------------------------
Out of Stock Report
-------------------
Product Forecast Report
-----------------------
Product Return By Date Range
----------------------------
Product Sales By Source
-----------------------
Purchase Order Analysis
-----------------------
Receiving Recap
---------------
Sales By How Paid Date
----------------------
Shipped Sales By Catalog
------------------------
Shipped Sales By Division
-------------------------
Summary Backorder Report
------------------------
Ticket Receiving
----------------
Where It Is
------------
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Exhibit F
1994 Q4 and Year 2000 Order Volume and SKU Projections
The following information reflects Fogdog's projected SKU and order volumes for
product fulfilled through Keystone.
SKU and order information for October 1999 through December 1999:
----------------------------------------------------------------
Average daily orders: [*] by December 1999
Peak daily orders: [*] (first week of December)
SKU's: [*] (Approximate breakdown: 30% apparel, 30% footwear, 30% large
hardgoods, and 10% small accessories)
SKU and order information for the year 2000:
Annual order volume: [*]
SKU's : growing to [*]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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