Termination of Fulfillment Services Agreement, Settlement Agreement and Release of Claims - OnLine Direct Inc. and Alloy Online Inc.
TERMINATION OF FULFILLMENT SERVICES AGREEMENT,
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SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS
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THIS TERMINATION OF FULFILLMENT SERVICES AGREEMENT, SETTLEMENT AGREEMENT
AND RELEASE OF CLAIMS (the "Agreement") is made and entered as of the below
execution date (the "Effective Date").
WHEREAS, OnLine Direct, Inc. (formerly known as Harrison Fulfillment
Services, Inc.) of 2515 East Street, Chattanooga, Tennessee, 37422-3057 ("ODI")
and Alloy Online, Inc. of 151 West 26th Street, 11th Floor, New York, New York,
10001 ("Alloy") entered into a Fulfillment Services Agreement dated July 23,
1997 as amended on September 1, 1997 and October 9, 1998 (collectively and with
any and all other amendments and/or contractual relationships, oral or written,
between the parties referred to hereinafter as the "Fulfillment Services
Agreement"); and
WHEREAS, ODI and Alloy desire to (1) amicably terminate the Fulfillment
Services Agreement between the parties effective immediately but provide that
ODI shall continue through May 15, 2000, pursuant to this Agreement, to service
the Alloy account at the same service levels and in the same manner as though
the Fulfillment Services Agreement had not been terminated (the "Transition
Period"), and (2) provide for cash payments by Alloy to ODI to settle fully and
finally any and all claims between the parties from the beginning of time to the
date of this Agreement related to the Fulfillment Services Agreement without
resort to arbitration and/or litigation and to provide for Transaction Fees and
reasonably anticipated cost payments associated with ODI providing services to
Alloy during the Transition Period as well as close down fees prescribed by the
Fulfillment Services Agreement; and
WHEREAS, Alloy has agreed to (1) make a cash payment to ODI upon execution
of this Agreement in the amount of [*], and (2) make a further cash payment to
ODI in the amount of [*] in payment of ODI Transaction Fee Invoice Numbers 7800,
7801 and 7818 to extinguish all
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Transaction Fees through March 31, 2000 (i.e. Invoice #7800 dated April 1, 2000
in the amount of [*]; Invoice #7801 dated April 1, 2000 in the amount of [*],
minus Credit Balance Invoice #7818 in Alloy's favor dated April 8, 2000 in the
amount of [*]), which sums collectively represent any and all actual, potential
or alleged claims, of any kind or nature under the Fulfillment Services
Agreement to resolve fully and finally any claims ODI had, has or might have
against Alloy related to the Fulfillment Services Agreement or the relationship
between the parties from beginning of time to the date of this Agreement,
including costs and fees related to the Transition Period (the "Claims");
provided, however, that the term "Claims" shall not include any future claims
for (i) unpaid Transaction Fees incurred by Alloy from April 1, 2000 through the
end of the Transition Period; and (ii) close down fees and expenses, not to
exceed the amount set forth in the attached Estimated Close Down Costs
memorandum attached hereto all of which shall continue to be payable to ODI as
if the Fulfillment Services Agreement were not terminated (collectively, the
"Excluded Claims").
NOW, THEREFORE, for good and valuable consideration (including, but not
limited to, the covenants and agreements hereinafter set forth), the receipt and
sufficiency of which hereby is acknowledged, the undersigned agrees as follows:
1. The parties hereby agree that the term "OnLine Direct, Inc." or "ODI" shall
include OnLine Direct, Inc. and any of its subsidiaries, subdivisions,
affiliates, successors, assigns, officers, directors, employees, agents and
representatives. The parties also agree that the term "Alloy Online, Inc." or
"Alloy" shall include Alloy Online, Inc. and any of its subsidiaries,
subdivisions, affiliates, successors, assigns, officers, directors, employees,
agents and representatives.
2. ODI shall continue to provide services to Alloy through May 15, 2000 at
the same Service Levels and with the same dedication as if the Fulfillment
Services Agreement had not
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been terminated and Alloy shall pay all Transaction Fees incurred and reimburse
all expenses prescribed by the Fulfillment Services Agreement for services by
ODI from April 1, 2000 through May 15, 2000. ODI further represents and warrants
that it will provide commercially reasonable service to Alloy to ensure, during
the Transition Period and immediately thereafter, that there is an adequate and
orderly servicing of Alloy's accounts and transition of those accounts and
Alloy's merchandise from ODI to whatever subsequent fulfillment service provider
Alloy identifies to ODI, which will be handling the Alloy account on or about
May 15, 2000.
3. ODI agrees that wherever the term "Claims" is used in this Agreement it
shall refer collectively to the Claims defined above and any and all claims,
rights or causes of action or liabilities whatsoever, whether based on federal,
state, local, statutory or common law or any other law, rule or regulation,
including without limitation, known or unknown claims for compensatory damages,
punitive damages, attorneys' fees, tort and contract damage claims, emotional
distress damage claims and expenses, costs and interest, and/or claims under or
related to the Uniform Commercial Code, and/or any and all federal and/or State
law claims.
4. Alloy hereby agrees that upon its receipt of an executed copy of this
Agreement, Alloy will cause two checks to be issued to ODI. The first check will
be issued to ODI in the amount of [*]. The second check will also be issued to
ODI upon execution of this Agreement in the amount of [*]. In addition, Alloy
shall pay Transaction Fees and the Close Down Fee, and reimburse expenses in
such amounts and at such times as are prescribed by the Fulfillment Services
Agreement, provided, however, that the final Close Down Fee shall not exceed the
[*] amount identified on the attached Estimated Close Down Costs memorandum. All
future Transaction Fees after April 1, 2000 through the Transition Period (as
well as any Services to be provided from the date hereof through May 15, 2000)
shall be billed pursuant to the terms of the Fulfillment Services Agreement.
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5. ODI acknowledges and represents that, except for the Excluded Claims, it
is owed no amounts not expressly set forth in this Agreement from Alloy and
further specifically waives any demand, default and/or notice obligations by
Alloy or arbitration rights ODI has or might have under the Fulfillment Services
Agreement.
6. The parties acknowledge and expressly agree that nothing in this Agreement
shall in any way be construed or considered to be an admission that either party
is or would have been the prevailing party in whole or in part in any proceeding
relating to the Fulfillment Service Agreement and/or the Claims.
7. ODI and Alloy agree, promise and covenant that, except as otherwise
specifically provided in this Agreement, neither of them, nor any other person,
organization, group, attorney(s), class or entity on their behalf, will file,
charge, claim, sue or cause or permit to be filed, charged, claimed or sued, any
action (including but not limited to arbitration), for damages or other relief
(including injunctive, declaratory or other equitable relief) against one
another or the additional Releasees involving any matter occurring in the past
up to the date of this Agreement, including any and all claims for relief and/or
damages which are or could have been the subject of arbitration or litigation
pursuant to the Fulfillment Services Agreement and/or the Claims.
8. In consideration of the covenants and promises and other good and valuable
consideration contained herein the receipt and sufficiency of which hereby is
acknowledged, ODI and its respective agents, designees, successors and assigns,
officers, principals, attorneys, and employees (collectively the "ODI-
Releasors"), and all persons acting by, through, under or in concert with them,
hereby irrevocably and unconditionally release, remise, and forever discharge
Alloy and all of Alloy's shareholders, parents, subsidiaries, divisions,
affiliates, officers, directors, employees, financing entities, attorneys,
agents, representatives, successors,
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predecessors and assigns (collectively in this paragraph "Releasees") of and
from any of the Claims, and, except with respect to Excluded Claims, from any
and all actions, causes of actions, suits, debts, charges, complaints, claims,
assessments, liabilities, obligations, promises, agreements, loans,
representations, warranties, controversies, damages, and expenses (including
attorney fees and costs actually incurred), of any nature whatsoever, in law or
equity, which ODI-Releasors had, now have, or hereafter may have against Alloy
and/or any other of the Releasees from the beginning of time to the Date of this
Agreement.
9. In consideration of the covenants and promises and other good and
valuable consideration contained herein from ODI, Alloy and its respective
agents, designees, successors and assigns, officers, principals, attorneys, and
employees (collectively the "Alloy-Releasors") and all persons acting by,
through, under or in concert with them, hereby irrevocably and unconditionally
release, remise and forever discharge ODI and all of ODI's shareholders,
parents, subsidiaries, divisions, affiliates, officers, directors, employees,
financing entities, attorneys, agents, representatives, successors, predecessors
and assigns (collectively in this paragraph "Releasees") of and from any of the
Claims, and, except with respect to Excluded Claims, from any and all actions,
causes of actions, suits, debts, charges, complaints, claims, assessments,
liabilities, obligations, promises, agreements, loans, representations,
warranties, controversies, damages, and expenses (including attorney fees and
costs actually incurred), of any nature whatsoever, in law or equity, which
Alloy-Releasors had, now have, or hereafter may have against ODI and/or any
other of the Releasees from the beginning of time to the Date of this Agreement.
10. The parties expressly acknowledge that this Agreement is intended to
include in its effect, without limitation, all of the Claims which have arisen
and of which they know or do not know, should have known, had reason to know or
suspect to exist in their favor as of the
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Effective Date of this Agreement, and that this Agreement contemplates the
extinguishment of the Claims.
11. This Agreement supersedes any and all prior oral and/or written
agreements between the parties. This Agreement shall be governed by and
construed in accordance with the internal law of the State of Tennessee, without
giving effect to conflict of law principles thereof. The parties also agree
that any action relating to the terms and provisions of this Agreement shall be
commenced in Tennessee in any court of competent jurisdiction. The terms of
this Agreement are severable, and if for any reason any part hereof shall be
found to be unenforceable, the remaining terms and conditions shall be enforced
in full.
12. The parties hereby acknowledge that they have read this Agreement
carefully, that they have been afforded sufficient time to understand the terms
and effects of this Agreement, that they have engaged counsel to advise them on
all of the terms and effects of this Agreement prior to executing this
Agreement, that they voluntarily are entering into and executing this Agreement,
and that neither the parties, nor their agents or representatives, have made any
representations inconsistent with the terms and effects of this Agreement.
13. All parties to this Agreement hereby agree that the signature pages
attached hereto will be executed in counterpart as an instrument under seal and
each of the following warrants and represents that he is duly authorized to
execute this Agreement binding the parties to the obligations it contains.
AGREED TO BY:
ONLINE DIRECT, INC.
/s/ Joseph Dresnok
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Joseph Dresnok, President
ALLOY ONLINE, INC.
/s/ Matt Diamond
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Matt Diamond, Chief Executive Officer
Dated: April 14, 2000
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Estimated Close Down Costs
For Alloy
Closedown Scheduled for 5/15/00
1. INFORMATION SERVICES
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A. Programming required for file transfer to new fulfillment vendor:
Labor [*] hrs. @ $[*] per hour = $[*]
Files required:
All order/shipment/payment/credit activity since COPS conversion
Item Master
Offering Master
*Assumes no legacy information will be required for pull
B. Programming required to put in system blocks for order entry and
Pick document allocation
Labor [*] hrs @ $[*] per hour = $[*]
C. Final Set of Reports
Unless otherwise requested, will be May month end = $[*]
D. Final Set of Tapes for List House(s) (? sets)
Labor [*] hrs. @ $[*] per hour = $[*]
Actual Tapes [*] Tapes @ $[*] each = $[*]
E. Management hours (required for disabling system id's, web access,
COPS access, etc.)
Labor [*] hrs. @ $[*] per hour = $[*]
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Total IS = $[*]
*New fulfillment vendor must accept the HFS file layouts with no modifications
required for the above labor quotes to be accurate. Any changes will require a
re-estimation.
2. WAREHOUSE
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A. Transfer of merchandise-pulling items from active, reserve, and damages and
preparing for shipment. This includes discarding or shipment of damages if
instructed by Alloy as well as pulling out all filed orders, returns,
correspondence, etc. to be forwarded to the new center.
Labor [*] hrs @ $[*]/hr = $[*]
Overtime [*] hrs @ $[*]/hr = $[*]
Supervisory [*] hrs @ $[*]/hr = $[*]
Management [*] hrs @ $[*]/hr = $[*]
Admin [*] hrs @ $[*]/hr = $[*]
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= $[*]
B. Shipping Materials
Boxes [*] @ $[*]/ea = $[*]
Pallets [*] @ $[*]/ea = $[*]
Materials (tape, labels, void fill, shrink wrap) = $[*]
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= $[*]
TOTAL WAREHOUSE = $[*]
Estimate is based on counting active inventory only. Reserve counts will be
taken from reserve carton labels. All freight costs will be the responsibility
of Alloy and will be direct billed to Alloy.
3.
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MISCELLANEOUS
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A. HFS will assume that certain items will slip through the mail forwarding
order and that returns will continue to come here for a period of time:
Returns per pallet @ $[*] each
Correspondence/orders per pack @ $[*] each
Returns will be sent freight collect or direct bill to Alloy. Packages will be
sent COD.
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A. TOTAL CLOSEDOWN FEES = $[*]