SERVICING, WAREHOUSING & DISTRIBUTION AGREEMENT
THIS SERVICING, WAREHOUSING AND DISTRIBUTION AGREEMENT (the
"Fulfillment Agreement" or "Agreement") is made this 1st day of
January, 1997, by and between STREAMLINED SOLUTIONS INC., a corporation
organized and existing under the laws of Oregon, and doing business as
The Warehouse, hereinafter referred to as "The Warehouse," and BLOWOUT
ENTERTAINMENT, INC., a Delaware corporation, hereinafter referred to as
"Client."
R E C I T A L S:
The Warehouse provides customers with, among other things,
warehousing, distribution, and inventory services.
Client is a distributor of goods and merchandise (hereinafter,
"Stock") and desires to contract with The Warehouse for certain of The
Warehouse's services under the covenants, terms, and restrictions contained
herein.
THEREFORE, for valuable consideration as set forth herein, Client and
The Warehouse agree as follows:
SECTION 1
THE WAREHOUSE'S SERVICES
1.1 FULFILLMENT SERVICES. The Warehouse agrees to provide certain
warehouse space, labor, and operational equipment, in order to provide the
following services to Client at the Client's request:
a) Making space available to Client for Client's storage of
Client's Stock; and
b) Electronic manifesting, transfer to delivery carrier,
transportation monitoring, and quality assurance reporting regarding
Client's Stock sent or delivered from The Warehouse's warehouses.
Appendix I contains a description of these services and fees selected
by Client and the terms and conditions of Appendix I are incorporated
herein as if fully set forth.
1.2 PROVISION OF SERVICES. All services provided by The Warehouse
are subject to the provisions of this Fulfillment Agreement, including any
Exhibits and Appendices hereto.
SECTION 2
TERM
2.1 TERM. This Agreement shall be effective as of the date first set
forth above and shall continue in full force and effect for one (1) year
from the date hereof unless terminated by either party as provided in
Section 6.2 hereof.
SECTION 3
PRICING AND PAYMENT
3.1 PAYMENT. Client shall pay for the services performed by The
Warehouse in accordance with the schedule of fees, rates, or charges set
forth on the attached Appendix I.
3.2 ADDITIONAL CHARGES. If The Warehouse is requested to perform
services not listed in Appendix I, the parties shall agree in a prior
writing as to the services to be performed and the charges to be paid for
the services.
3.3 ELECTRONIC COMMUNICATIONS. If Client and The Warehouse agree to
establish an electronic communications system for some or all of the
services provided under this Agreement, Client shall pay for any and all
fees, expenses, software, and hardware as are necessary to establish such
system. The parties will jointly determine what system requirements are
necessary.
3.4 PRICING CHANGES. The Warehouse will not change charges under
this Agreement without notice to Client. The Warehouse reserves the right
to increase all fees, rates, or charges set forth herein and in Appendix I,
at any time and from time to time in the same percentage amounts and at the
same times as such fees, rates or charges are increased to The Warehouse by
the provider of such goods or services to The Warehouse.
3.5 INVOICES. All services provided hereunder shall be invoiced by
The Warehouse to Client and are due net thirty (30) days.
3.6 NONWAIVER. The failure of The Warehouse to invoice Client for
services during any month is not a waiver of The Warehouse's right to
payment for such services.
3.7 DELINQUENCY. The Warehouse encourages prompt payment by its
clients. Payment must be received by The Warehouse within thirty (30) days
of date of invoice or The Warehouse may elect to declare Client in default
hereunder without any further notice being required. Until such default is
cured, an interest shall be assessed on the balance owed in the amount of
one and one-half percent (1 1/2 %) per month or the maximum amount allowed
by applicable law, which is lower. Assessment of such a charge shall not
be deemed a waiver of such default or of any other remedy The Warehouse may
have hereunder or at law.
3.8 CURRENCY. All currency is stated in United States Dollars and
shall be paid in United States Dollars.
SECTION 4
WAREHOUSING
4.1 RECEIPT. All Stock submitted for The Warehouse's services under
this Agreement shall be delivered at Client's expense to The Warehouse's
dock at 0000 Xxxxx Xxxxx 00 Xxxxx, Xxxxxxxxxx, Xxxx, 00000, or such other
location as may be designated by The Warehouse form time to time. All such
Stock shall be in good condition, properly marked, sized, and packaged in
manageable containers as determined in The Warehouse's sole discretion.
The Client shall inform The Warehouse prior to or at delivery of any
special precautions necessitated by the nature, conditions, or packaging of
the Stock and of all statutory requirements specific to the Stock with
which The Warehouse does or may need to comply.
4.2 NONACCEPTABLE STOCK. The Warehouse will not accept
"Nonacceptable Stock" for warehousing, inventory, or distribution.
"Nonacceptable Stock" is defined as and shall include, but is not limited
to, the following:
a) Improperly identified Stock or Stock not in compliance
with any of the provisions of this Agreement;
b) Alcoholic beverages, drugs, perishables, refrigerated
items, live animals, firearms, negotiable items, explosives,
hazardous materials, hazardous liquids, hazardous gases, or
hazardous wastes, personal effects, plants, pornographic
materials, seeds (except popcorn seeds), tobacco, highly
flammable materials or liquids, bio-hazardous materials, human
body parts, fluids, or remains;
c) Any Stock which is prohibited from ownership, storage,
shipment, or sale by law or regulation of any national, state, or
local government in the country of origin, at The Warehouse's
warehouse or in the intended destination;
d) Stock to which Client does not have clear, unencumbered
title or which is moving under COD, FCR, FCT or cash against
documents;
e) All Stock identified on the International Association for
Transportation by Air ("IATA") List of Dangerous Goods (as
revised from time to time), or which by its nature is liable to
cause death, injury or damage;
f) Stock exceeding any size or weight restrictions which may
be set forth by The Warehouse or its distribution carriers for
shipment; and
g) Stock not accepted by The Warehouse's distribution
carriers for shipment; and
h) Stock intended for distribution to Canada (The Warehouse
specifically will not ship or distribute Stock to Canada).
The Warehouse may at any time with notice to the Client, amend the
list of items which are Nonacceptable. The Warehouse's determination that
Stock is Nonacceptable is final and in its sole discretion. The Warehouse
may reject any Nonacceptable Stock at any time. All Nonacceptable Stock
will be returned to or held for the Client at the Client's expense and at
The Warehouse's discretion.
4.3 INSPECTION. The Warehouse reserves the right to open and inspect
any packages of Stock received by it for warehousing or distribution.
Client's representative shall be permitted to enter into The Warehouse's
warehouse at all times during working hours for the sole purpose of
inspecting Client's Stock at Client's expense, provided such representative
is accompanied by a The Warehouse employee. The Client shall be liable for
and shall indemnify and hold The Warehouse harmless from any and all
damages, injuries, or consequential damages, caused to or caused by its
representative.
4.4 HOURS. Inbound shipments to The Warehouse's warehouse and
distribution center shall be from 8:00 a.m. to 11:30 p.m. Eastern Standard
Time, Monday through Friday, subject to change from time to time unless
alternative arrangements have been made with The Warehouse prior to
arrival.
4.5 FREIGHT CHARGES. Distribution shall be at the Client's expense
at the prices and rates set forth in this Agreement and the appendices
hereto, and shall be made upon The Warehouse's receipt of valid written
authorization from Client.
4.6 DISTRIBUTION. "Distribution" in this Agreement shall mean that
The Warehouse shall deliver such outbound Stock to a carrier chosen by
Client for delivery in accordance with the authorized instruction of
Client. All finished, packed and properly labeled cartons of Stock made
available to The Warehouse for shipment will be delivered to carrier within
twenty-four (24) hours (weekends, holidays and other closures of The
Warehouse excepted) of delivery of availability. All such shipments must
include a written carton count, description of contends and any and all
such other information as The Warehouse may require. In the event
distribution cannot be made solely as a result of The Warehouse's conduct,
The Warehouse will waive the handling charges for such shipment.
4.7 COMPLIANCE WITH CUSTOMS REGULATIONS. The Warehouse intends to
comply with all applicable U.S. Customs regulations relating to Stock for
which it provides services under this Agreement. Client shall provide The
Warehouse with written notification of all Stock which is or will be the
subject of any U.S. Customs rules or regulations including the requirements
of such rules or regulations and such other information as The Warehouse
shall request. Client shall further identify to The Warehouse in advance
all distribution shipments destined for shipment outside the U.S. and
provide all information and cooperation necessary to ensure The Warehouse's
compliance with conformance to such rules and regulations.
SECTION 5
LIABILITY/INDEMNIFICATION/INSURANCE/SECURITY
5.1 INSURANCE. At the Client's written request and upon the Client's
agreement to pay the applicable premium, The Warehouse will request
insurance coverage under The Warehouse's insurance policy to cover Client's
Stock. If so requested, Client hereby accepts the amounts and types of
coverage so provided. Except as specifically set forth in this
Section 5.2, Stock stored or warehoused by The Warehouse, its subsidiaries,
or affiliates, is not insured against loss or damage.
5.2 LIABILITY. The Warehouse shall not be liable to Client for any
damage, loss, demurrage, or injury to Stock of Client unless such loss is
the result of The Warehouse' reasonably careful person would exercise under
like circumstances, and The Warehouse shall not be liable for damages that
could not have been avoided by the exercise of such care. Client agrees
that it shall bear the burden of proving that The Warehouse failed to
exercise such care. The Warehouse shall not under any circumstances be
liable to Client for any damage, injury, loss, demurrage, or default in its
obligations of any kind which arise directly or indirectly from the
following:
a) fire, war, act of God, or any natural disaster or calamity;
b) power outages;
c) strikes, lock-outs or labor disputes at The Warehouse, its
carrier(s), or at any party providing services to The Warehouse;
d) any governmental action; or
e) any other circumstances beyond the reasonable control of The
Warehouse.
5.3 CONSEQUENTIAL DAMAGES. The Warehouse shall not be liable to
Client or any third party for any indirect or consequential loss or
damages, however arising, including but not limited to, loss of income,
loss of profit, loss of opportunity, or other loss or damage as a result of
the requests of the Client as to the Stock or distribution thereof.
5.4 LIABILITY LIMIT. The maximum liability of The Warehouse for any
item of Stock in its possession shall be the lesser of $100 or the Client's
actual cost of the item. Prior to payment by The Warehouse of any claim
for loss or damage, Client shall provide proof of Client's cost to The
Warehouse. In addition, The Warehouse shall be entitled to, at The
Warehouse's election, set-off and/or subrogation for any insurance proceeds
recovered or recoverable by the Client regardless of whether the Client
files an insurance claim or not.
5.5 CLAIM. Any Client claim to The Warehouse shall be presented in
writing by the Client within a reasonable time, but in no event later than
fifteen (15) days after the loss or damage was identified by the Client or
notification of the loss or damage was provide to the Client.
5.6 LIABILITY FOR INVENTORY SHRINKAGE. Client shall retain primary
control of Stock held in The Warehouse's warehouse. The Warehouse shall
not be liable for any Client losses as a result of inventory shrinkage, and
Client shall hold The Warehouse harmless therefrom.
SECTION 6
MISCELLANEOUS
6.1 ASSIGNMENT. The rights and obligations of the Client created
under this Agreement may not be transferred, or assigned to a third party,
or for the benefit of a third party, either directly or indirectly, without
the prior written consent of The Warehouse. The Warehouse may transfer any
or all of its rights and obligations under this Agreement at any time and
without notice of any kind.
6.2 TERMINATION. The Warehouse may terminate this Agreement at
expiration of the term, upon sixty (60) days' written notice to Client.
Client may terminate this Agreement at expiration of the term after first
providing The Warehouse with sixty (60) days' written notice, provided
that, if Client intends to obtain all or any of the services provided by
The Warehouse under this Agreement from an alternate source, then Client
shall provide The Warehouse with sixty (60) days' written notice of intent
to seek other alternate sources for fulfillment services. At the end of
such sixty (60) day period, Client must provide The Warehouse with complete
detailed descriptions of all alternate bids to provide all or any portion
of such services and The Warehouse shall have sixty (60) days to meet such
bids for any such services The Warehouse may choose to offer. To the
extent The Warehouse's bids are equal to or better than the alternate
fulfillment source, Client may not terminate this Agreement and shall
engage The Warehouse to provide such services for the remaining term of
this Agreement. Client agrees that, upon giving notice to The Warehouse of
such termination, the terms of this Agreement shall be automatically
amended to require payment for all services hereunder on a net ten (10) day
basis. Upon termination, all confidential information held by either party
shall be promptly returned to the other.
6.3 NOTICE. All notices or notification required hereunder shall be
deemed sufficient if in writing and sent via first class mail, postage
prepaid, to the attention and address as set forth as follows:
The Warehouse: Streamlined Solutions, Inc.
d/b/a The Warehouse
c/o 0000 Xxxxx Xxxxx 00 X.
Xxxxxxxxxx, Xxxx 00000
Attn: Xx Xxxxxxx
Client: Blowout Entertainment, Inc.
X.X. Xxx 00000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxx
6.4 THIRD-PARTY INTERESTS. Client shall at all times notify The
Warehouse of any and all other corporations, persons, or entities that have
any interest in the Stock which is warehoused, deposited, or stored with
The Warehouse.
6.5 SEVERABILITY. In the event that any of the terms of this
Agreement shall be deemed invalid, unlawful, or unenforceable to any
extent, such term shall be severed from the remaining terms which shall
continue to be valid to the fullest extent permitted by law.
6.6 TAXES. The Client agrees to pay and/or indemnify The Warehouse
from all taxes, including but not limited to sales, use, personal,
franchise, gross receipts, excise, tariff, franchise and business taxes,
together with any penalties, fines, or interest thereon, imposed by any
federal, state, province, local government, or any other taxing authority
with respect to the sale, delivery, shipment, or storage of the Client's
Stock.
6.7 GOVERNING LAW. This Agreement and all controversies, claims and
causes of action relating hereto shall be governed by and construed in
accordance with the laws of the state of Oregon without regard to its
conflicts of laws principles.
6.8 JURISDICTION. The parties of this Agreement, their successors or
assigns, agree that any disputes under or relating to this Agreement shall
only be resolved in the Circuit Court for Multnomah County, Oregon or the
U.S. District Court for the District of Oregon, and Client waives any
objection to such jurisdiction.
6.9 CONFIDENTIALITY/NONCOMPETE. Client and The Warehouse each
acknowledge the sensitivity and importance of information and documents
exchanged or acquired pursuant to this Agreement. Client's customers'
names, Stock, ordering and shipping quantities are confidential and the
property of Client. The details of this Agreement, The Warehouse's
logistics, software, quotations, operations, costs, customers' names, price
schedules, and all other related documents, information, and appendixes are
confidential and owned by The Warehouse. Neither party shall disclose any
of the other parties' confidential information to any third party except
such party's attorneys and accountants without first obtaining the prior
express written authorization of the other party. Neither party shall use
the name or trademarks of the other in any advertisement without first
obtaining the prior express written permission of such party. The Client
shall further not enter into any competitive warehousing and distribution
business, or any competitive agreements with The Warehouse's
subcontractors, carriers, or other The Warehouse customers during the term
of this Agreement. The parties agree that this clause shall survive the
termination of this Agreement.
6.10 MEASURE UNITS. Unless expressly stated otherwise in this
Agreement, all units of measure shall be United States Standard
Measurement.
6.11 REPRESENTATIONS. Client represents and warrants that it is a
Delaware corporation in good standing and that its Officers are authorized
by its articles of organization, and its Board of Directors and
Shareholders to enter into this Agreement. If further warrants that there
have been no adverse changes in its financial condition since the date of
the latest financial statements supplied to The Warehouse and that it is
able to meet all financial obligations created herein and Client represents
and warrants that nothing herein violates any other obligations or
agreements of Client or creates any situation or circumstance for which The
Warehouse is or may become liable to any third party.
6.12 ENTIRE AGREEMENT. This Agreement and its appendices and exhibits
contains the entire agreement and understanding of the parties as to the
subject matter herein, and supersedes all other prior agreements,
understandings and arrangements, written or oral, between the parties
relating to the subject matter hereof.
THE WAREHOUSE: CLIENT:
STREAMLINED SOLUTIONS, INC., BLOWOUT ENTERTAINMENT, INC.
d/b/a The Warehouse
By: /s/ By: /s/ Xxxx Xxxxxx
Title: VP Distribution Title: Chief Financial Officer
APPENDIX I
TO
SERVICING, WAREHOUSING & DISTRIBUTION AGREEMENT
BETWEEN
STREAMLINED SOLUTIONS, INC., D/B/A THE WAREHOUSE
AND
BLOWOUT ENTERTAINMENT, INC.
FACILITY SPACE
Facility Space Reserved: 12,800 square feet--unimproved, heated, shell
warehouse space without racks with electricity
provided through existing 100 VAC and 200 VAC
outlets.
Rate for Facility Space: $3.75 per square foot, per year, billed in equal
monthly amounts.
Availability Date: Upon execution.
FULFILLMENT SERVICES
Nature of Stock: Video cassettes
Stock Handling Charges: $.02 per cassette (includes shipping, manifesting
and application of shipping labels). This rate
contemplates 100 cassettes per carton, full carton
lots. Charges will vary if quantities vary.
Freight Charges: 3% reduction from UPS published rates for outbound
freight.
Airborne Express as set forth on the attached
Exhibit A [ATTACH 10/30/96 PROPOSAL]
INVOICE TERMS
All charges due net thirty (30) days from date of invoice.
ADDITIONAL SERVICES
Available at negotiated rates.
