Fulfillment and Customer Service Services Agreement - Infinity Resources Inc. and Playboy.com Inc.
FULFILLMENT AND CUSTOMER SERVICE SERVICES AGREEMENT
THIS FULFILLMENT AND CUSTOMER SERVICE SERVICES AGREEMENT (including
all Exhibits hereto, the "Agreement") is made and entered into as of January 2,
2004 (the "Effective Date"), between Infinity Resources, Inc., an Illinois
corporation ("Infinity"), and Playboy.com, Inc., a Delaware corporation
("Playboy.com"). Certain capitalized words used in this Agreement are defined in
Section 15.1.
In consideration of the mutual promises contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties agree as follows:
1. Purpose.
1.1 Termination of Prior Agreement. As of the Effective Date,
Playboy.com and Infinity do hereby terminate the Fulfillment and Customer
Service Services Agreement entered into by the parties hereto as of October 2,
2000 (the "Prior Agreement"), mutually and for convenience not cause, without
any penalty to either party, and agree that the terms of the Prior Agreement
shall be replaced in full by the terms set forth herein. Except as may be
otherwise set forth in this Agreement, each party hereby releases the other from
any and all claims arising from the Prior Agreement whether based on contract,
tort, statutory or other legal or equitable theory of recovery.
1.2 Appointment. During the Term of this Agreement (as defined
in Section 6.4 below), Playboy.com appoints Infinity, and Infinity agrees to
serve, as Playboy.com's primary warehousing, fulfillment and customer service
provider. Playboy.com agrees to use commercially reasonable efforts to ensure
that Infinity is its provider of such services for not less than ninety percent
(90%) of all domestic E-Commerce/Direct Commerce products for (the "Products")
which Playboy.com is the principal, excluding without limitation, magazine and
online subscriptions, Affiliate sales, any continuity series and any products
which are shipped directly from a manufacturer. Infinity may use Affiliates to
provide the Services described herein. Infinity must ensure that any Affiliate
that provides Services complies with the terms and conditions of this Agreement.
1.3 Transition. Infinity agrees to utilize and provide
Playboy.com with inventory and order management systems which provide features
and functionality at least as comprehensive as its existing inventory and order
management systems and which at a minimum will include the features and
functionality set forth in Exhibit A. In partial consideration of this
Agreement, Infinity will provide programming services to migrate Playboy.com
from the current MOMS system to Infinity's CRM system with features and
functionality at least as comprehensive as its existing inventory and order
management systems and within the scope previously agreed upon by the parties,
including all existing Order Power functionality and those
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enhancements set forth on Exhibit E. Infinity shall pay all costs associated
with such migration except those costs attributed to Playboy.com in Exhibit E.
2. Product Receipt and Warehousing.
2.1 Product Receipt.
(a) Playboy.com shall enter purchase orders for Products
to be supplied by Playboy.com's vendors into the Purchase Order System. Infinity
will receive all such delivered Products from Playboy.com and/or Playboy.com's
vendors.
(b) Upon receipt, Infinity will unload the Products,
perform a quantity count and verification, conduct a damage check and
assessment, process the receipt of inventory and warehouse the Products in
accordance with Section 2.2.
2.2 Warehousing.
(a) During the Term of this Agreement, Infinity shall
use commercially reasonable means to receive, handle, store and protect the
Products from damage, theft and other adverse events.
(b) Infinity shall store the Products in a secured
facility. Only Infinity's employees and agents and Playboy.com's authorized
employees and agents will have access to the Products. In addition, Infinity
shall maintain a separate area of the Warehouse Facilities with locked and
secured access, including, but not limited to, a security cage (the "Secured
Area"). Playboy.com may designate a reasonable amount of inventory as High Risk
Products, which shall be stored in the Secured Area. Furthermore, Playboy.com
acknowledges that Infinity provides warehousing services to third parties and
that not all of the Products will be maintained in areas of the Warehouse
Facilities which are separate from such third parties' inventory.
Notwithstanding the foregoing, Infinity shall take all reasonable measures to
ensure that Playboy.com's inventory is secure and clearly designated as
Playboy.com's inventory.
(c) Playboy.com shall have the right to inspect the
Products, in whole or in part, upon receipt by Infinity and shall have the right
to reject such Products; provided, however, that Infinity shall bear no
liability for such rejected Products. Infinity shall provide a holding area for
Products received whose acceptability is questionable. Playboy.com will advise
Infinity on the disposition within five (5) Business Days of notification by
Infinity of such questionable Products.
(d) Infinity shall conduct cycle counts in order to
assure the accuracy of the inventory, as set forth in Exhibit C. If stock
differences are found in any inventory, Infinity will list gains as receipts,
and losses as deductions, thus correcting the book record to agree with the
actual Products on hand. These changes will be made on an ongoing basis;
provided, however, that Infinity shall promptly notify Playboy.com in writing
when such changes are made. Infinity will take such additional physical
inventories as reasonably requested by Playboy.com upon advanced written notice
of not less than two (2) Business Days, the actual costs of which shall be at
Playboy.com's expense. Representatives of Playboy.com may be present during any
inventory.
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3. Customer Service, Order Processing and Order Fulfillment.
3.1 Customer Service. Infinity shall provide first-level
customer service to the customers of Playboy.com (the "Customers") in accordance
with Exhibit B.
3.2 Order Processing. Infinity shall process E-Commerce Orders
and Direct Commerce Orders in accordance with Exhibit B.
3.3 Order Fulfillment.
(a) After receipt of an order, Infinity will (i) fill
the order from the inventory of Products at the Warehouse Facilities, (ii)
insert all packing slips in accordance with Section 3.3(c) below, (iii) if
requested, gift wrap the Products, and (iv) pursuant to Playboy.com's
instructions, and based upon availability of Products in stock, ship the order
to Customers either as a multiple shipment or as one shipment. Playboy.com shall
provide Infinity with ten (10) Business Days notice of any comprehensive gift
wrap promotions it intends to implement. Infinity shall use a common carrier
reasonably acceptable to Playboy.com. In the event that Infinity does not have a
Product in stock in order to fulfill an order (a "Backordered Product"),
Infinity agrees to act in accordance with Section 3.3(f) below. Furthermore,
Infinity shall obtain written approval from Playboy.com before changing
agreed-upon common carriers. In the event that Infinity negotiates any
reductions in shipping costs or adopts any new shipping methods and is actually
invoiced at such lower costs Infinity agrees that it shall promptly pass along
to Playboy.com the savings so realized . Any programming provided by Infinity to
enable implementation of the new carrier specifically for Playboy.com shall be
pre-approved by Playboy.com and invoiced to Playboy.com to enable the
utilization of the new carrier. Notwithstanding the foregoing, any programming
that is required by Infinity to implement such new carriers for its own
operations will be supplied to Playboy.com at no additional charge to
Playboy.com
(b) Infinity will acknowledge receipt of orders to
Playboy.com on the Order Management System. Acknowledgment will be made promptly
within one (1) hour after an order is received into Infinity's AS 400 and will
identify the availability of the Products.
(c) Infinity will print all packing slips (other than
special inserts), including printing the text of any special message requested
by Playboy.com on the standard packing slip at no extra cost. Infinity will
insert the standard packing slip and all additional packing slips requested by
Playboy.com, including special inserts provided by Playboy.com; provided,
however, that (i) Playboy.com will bear the cost of providing such special
inserts and additional packing slips and (ii) all non-Playboy.com inserts shall
be approved by Playboy.com. Furthermore, Infinity will print and apply Customer
addresses or affix shipping labels on orders being shipped to Customers as part
of its fulfillment obligations hereunder.
(d) Infinity will provide processing and support
services with respect to gift certificates purchased and/or redeemed by
Playboy.com Customers through E-Commerce Orders. In the event that a Customer
encounters problems with the purchase or redemption of such gift certificates
and requests assistance (whether by email or telephone), Infinity will provide
such assistance.
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(e) Infinity will make available on its Order Management
System the following information to Playboy.com:
(i) all orders filled by Infinity on the preceding
Business Day and which includes the following information for each such order:
the order number, the Customer's name and address, an itemization of Products
shipped, the price charged by Infinity to Playboy.com for each Product and
shipping and handling charges to Customers and to Playboy.com;
(ii) all Product returns (identified by invoice
number) processed by Infinity for the preceding Business Day and indicating
quantity and invoice amount; and
(iii) all orders canceled on the preceding
Business Day and which includes the following information for each canceled
order: the order number, the Customer's name, the title of each Product, the
quantity of all Products and the customer service representative who canceled
the order on behalf of the Customer.
(f) Infinity shall promptly enter into the Order
Management System any Backordered Products so that Playboy.com may promptly
identify which Products need to be supplied. Upon receipt of any Backordered
Products, Infinity shall follow the procedures set forth in Section 3.3(a). For
purposes of Section 3.3(a), orders for Backordered Products shall be deemed to
have been placed upon the date the Backordered Products are received into
inventory by Infinity.
3.4 Other Services. In the event that Playboy.com requires
services that exceed the scope or extent of the Services provided for herein,
including, but not limited to, coupon support and other premium services ("New
Services"), and if Infinity agrees to provide such New Services, Playboy.com and
Infinity shall negotiate in good faith the terms and conditions, including
price, under which Infinity shall provide New Services. In the event that the
parties agree to New Services, the scope and duration of the New Services shall
be described in an addendum to the appropriate Exhibit hereto and thereafter
such New Services shall be considered Services hereunder. Playboy.com may elect
to reduce or terminate any of the New Services upon not less than thirty (30)
days' prior written notice to Infinity. Except as otherwise provided herein, to
the extent Playboy.com elects to reduce or terminate any of the Services or to
the extent the parties mutually agree to cancel or terminate any of the New
Services, such services shall be deemed modified or deleted, as applicable, from
the appropriate Exhibit hereto, with the remaining services thereafter
constituting the Services.
3.5 Service Levels.
(a) Except as the parties may otherwise mutually agree,
Infinity shall provide and perform the Services at levels of service
Substantially similar to the levels of service provided by Infinity or one or
more of its Affiliates to Playboy.com prior to the Effective Date hereof, and in
any event with the same degree of care, skill and prudence customarily exercised
by it for its own operations.
(b) Except as otherwise provided for New Services in
Section 3.4,
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Playboy.com may request a reduction or termination of any (or all) of the
Services upon not less than ninety (90) days' prior written notice. in the event
that Playboy.com ceases to be in the direct commerce or e-commerce business.
Playboy.com hereby represents and warrants that as of the Effective Date of this
Agreement, it has no intention of ceasing to be in either the direct commerce or
e-commerce business.
(c) Infinity agrees to provide the Services in
accordance with the Service Performance Levels set forth on Exhibit C. In the
event that a particular Service falls below the applicable Service Performance
Level, Playboy.com shall provide written notice to Infinity of such failure to
perform. As used herein, a "Service Deficiency" is an event of failure by
Infinity to supply Services in accordance with Exhibit C. *****
3.6 Insurance. Infinity shall maintain at all times during the
Term of this Agreement insurance as provided below and shall name Playboy.com as
an additional insured to the extent of indemnity provided herein under its
liability policies as follows:
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(a) Commercial general liability insurance including
premises/operations, broad form property damage, independent contractors, and
contractual liability covering Infinity's obligations hereunder for bodily
injury and property damage, with a combined single limit of not less than
$1,000,000 each occurrence and $6,000,000 umbrella coverage.
(b) Workers' compensation insurance in statutory amounts
covering Infinity and its employees, and employer's liability insurance in an
amount not less than $500,000 per accident/disease.
(e) All insurance required above shall be carried with
insurance companies licensed to do business in the state(s) where operations are
maintained with a rating of no less than A-. Infinity shall deliver to
Playboy.com, upon execution of the contract, certificates of insurance as
evidence of the required coverages. Infinity agrees that these policies shall
not be canceled or materially changed without not less than thirty (30) days'
prior written notice to Playboy.com. Such notice shall include written
confirmation and details of replacement insurance coverages and other material
revisions to the policies, which shall be effective immediately upon any
cancellation or material change in Infinity's policies in order that no gap in
coverage results.
4. Returns.
4.1 Each shipment of Products to Customers will include
Playboy.com's then-current return policy (the "Return Policy") as supplied by
Playboy.com, including instructions that Customers are to make returns of
Products to 900 Rohlwing Road, Itasca, IL 60143 or to such other address as
mutually agreed upon by the parties.
(a) Within two (2) Business Days of receipt by Infinity,
all returned Products will be logged as having been received and placed back in
stock, if applicable, or held aside for Playboy.com personnel to inspect and
advise on proper disposition.
(b) With respect to Product returns resulting from
mishandling by Infinity, including, but not limited to, incorrect address
inputting, Products shipped erroneously to Customers or the shipment of Products
known by Infinity to be Unmerchandisable Products prior to shipment by Infinity
(collectively, the "Mishandled Products"), Infinity shall promptly reship the
correct order to Customers at no additional Services cost to Playboy.com. As
used in this Section 4.1(b), knowledge as to any person shall include without
limitation such person's observation with the naked eye that the Product was an
Unmerchandisable Product.
(c) Playboy.com will be issued a credit by Infinity for
the price paid by Playboy.com for Services for any returned Products that are
not reshipped pursuant to Section 4.1(b).
(d) Playboy.com shall reimburse Infinity for any freight
costs incurred for returned Products, except that Infinity shall bear freight
expenses for returns of Mishandled Products to Infinity by Customers.
4.2 Infinity will use commercially reasonable efforts and
standards to
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ensure that Unmerchandisable Products are not shipped to Customers, and will
package Products for shipment to Customers in a manner which is commercially
reasonable to prevent damage during shipment.
4.3 Infinity will insure shipments of Products with an
aggregate value in excess of $250.00. The costs of such insurance will be billed
to Playboy.com at Infinity's actual cost of acquiring such insurance and
Infinity shall provide Playboy.com with a monthly report detailing the costs for
such insurance. Playboy.com reserves the right to adjust the threshold amount
for insurance coverage at any time upon not less than thirty (30) days' prior
written notice to Infinity.
5. Pricing and Payment Terms.
5.1 Services will be charged on either a per Contact basis
("Per Contact Services"), a per minute basis ("Per Minute Services") an annual
basis ("Annual Services"), a cost per Shipment basis ("Per Shipment Services"),
or a miscellaneous basis ("Miscellaneous Services") as specified on Exhibit D.
5.2 Playboy.com shall be responsible for collection of all
payments for sales of Products and for the determination and payment of all
applicable taxes, including sales taxes.
5.3 For Per Contact Services , Per Minute Services, Per
Shipment Services and Miscellaneous Services, Infinity shall invoice Playboy.com
as soon as possible but in no event more than five (5) Business Days after the
end of each month for such Services rendered in the preceding month. For Annual
Services, Infinity shall invoice Playboy.com within five (5) Business Days after
the end of each month an amount equal to one-twelfth (1/12th) of the annual
amount specified on Exhibit D for such Annual Services, which will be deemed to
be Infinity's compensation for Annual Services rendered in the preceding month.
All invoices for Services shall be paid by Playboy.com no later than the
thirtieth (30) day following receipt of the month in which such invoice is
received by Playboy.com. Playboy.com agrees to pay a late payment charge of one
percent (1%) per month on all invoice amounts unpaid after the due date, except
for invoice amounts disputed in good faith by Playboy.com.
5.4 Infinity agrees that not later than August 15, 2004,
Infinity shall, in accordance with the terms of this Section 5, recompute all
months commencing with January, 2004 to the date hereof previously billed by
Infinity and paid by Playboy.com under the Prior Agreement, and apply credit
equal to one-half of any amount due Playboy to the next two (2) successive
monthly invoices for Services, beginning with the invoice for Services provided
in August, 2004. Playboy.com reserves the right to audit this calculation
pursuant to Section 13.1 below.
6. Term and Termination.
6.1 Term. The term of this Agreement shall begin on the
Effective Date and shall continue until ***** (the "Initial Term") or until it
is terminated in accordance with this Section 6 or as otherwise provided herein.
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6.2 Termination by Infinity. Infinity shall have the right
(but not the obligation) to immediately terminate this Agreement on or after the
occurrence of any of the following:
(a) Playboy.com is in material breach of any of its
obligations or representations hereunder, which breach is not cured within
thirty (30) days of receipt of written notice from Infinity of such breach; or
(b) Playboy.com (i) becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, and such
petition or proceeding is not dismissed within sixty (60) days of filing, or
(ii) becomes the subject of any involuntary petition in bankruptcy or any
involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, and such petition or proceeding is not
dismissed within sixty (60) days of filing.
6.3 Termination by Playboy.com. Playboy.com shall have the
right (but not the obligation) to immediately terminate this Agreement with no
further obligations to Infinity (provided, however, that Playboy.com shall make
payment to Infinity for all Services rendered prior to the termination of this
Agreement) on or after the occurrence of any of the following:
(a) Infinity is in material breach of any of its
obligations or representations hereunder, which breach is not cured within
thirty (30) days of receipt of written notice from Playboy.com of such breach;
(b) Infinity (i) becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, and such
petition or proceeding is not dismissed within sixty (60) days of filing, or
(ii) becomes the subject of any involuntary petition in bankruptcy or any
involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, and such petition or proceeding is not
dismissed within sixty (60) days of filing; or
(c) *****
(d) Playboy.com's request to terminate the Services (in
whole or in part) in accordance with the terms of Section 3.4, 3.5 or 14.
6.4 Renewal. At the end of the Initial Term, or any Renewal
Term (as defined below) then in effect, this Agreement will be renewed for a
further term of one (1) year (each, a "Renewal Term") if (i) Playboy.com
delivers to Infinity a written notice of renewal not later than sixty (60)
Business Days before the end of the Initial Term or such then-effective
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Renewal Term, as the case may be, and (ii) Infinity does not deliver to
Playboy.com a written notice of its election not to renew this Agreement within
ten (10) Business Days following receipt of such notice. The Initial Term
together with any Renewal Terms, shall be referred to herein as the "Term".
6.5 Notice of Termination. A party may exercise its right to
terminate pursuant to this Section 6 by sending appropriate prior written notice
to the other party as provided in Section 15.2 hereof. No exercise by a party of
its rights under this Section 6 will limit any other remedies available to such
party or such party's rights to exercise any other rights under this Section 6.
6.6 Effect of Termination.
(a) Infinity shall fulfill all orders placed prior to
the effective date of termination but shall have no responsibility to provide
any further Services to Playboy.com as of the effective date of termination.
Notwithstanding the foregoing, Infinity shall cooperate in and take all
reasonable steps as reasonably requested by Playboy.com for the transition of
such Services to such party as may be designated by Playboy.com. Any
pre-approved costs or expenses incurred by Infinity in connection with such
transition of Services shall be promptly reimbursed by Playboy.com.
(b) Except as necessary to perform its obligations under
Section 6.6(a), Infinity shall return all of Playboy.com's property within ten
(10) Business Days following the effective date of termination. Such transfer
shall be at Playboy.com's expense except in the case of termination by
Playboy.com for breach under Section 6.3(a).
(c) Except as necessary to perform its obligations under
Section 6.6(a), all licenses granted hereunder shall immediately terminate, and
Infinity shall immediately discontinue its use of the Playboy.com Marks. In
addition, Infinity shall promptly, upon the direction of Playboy.com and at
Infinity's sole expense, return or destroy any and all Marks or Confidential
Information of Playboy.com in its possession in any medium.
7. Confidentiality.
7.1 Confidential Information. Each party shall cause each of
its Affiliates and each of their officers, directors and employees to hold all
information (the "Confidential Information") relating to the business of the
other party disclosed to it by reason of this Agreement confidential and will
not disclose any of such Confidential Information to any third party, except as
provided in this Agreement. Each party shall limit disclosure of such
Confidential Information to those of its employees who have a need to know such
Confidential Information and shall inform those employees to whom such
disclosure is made of their obligations of confidentiality and limited use. The
obligations of this Section 7 shall not extend to any Confidential Information:
(a) that, on or after the date of this Agreement, comes
into the public domain through no fault of a party with a confidentiality
obligation under this Agreement;
(b) that is disclosed to a party with a confidentiality
obligation
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under this Agreement, without restriction on disclosure, by a third party who
has the lawful right to make such disclosure;
(c) that is required to be disclosed by a party by law,
or to a court or by a Governmental Body (as defined below); or
(d) that is disclosed to their respective directors,
officers. attorneys, accountants and other advisors, who are under an obligation
of confidentiality, on a "need-to-know" basis.
7.2 Customer Data. As between Infinity and Playboy.com,
Playboy.com owns all right, title and interest in the Customer Data with no duty
to account to Infinity. Customer Data shall be deemed to be the Confidential
Information of Playboy.com. Infinity shall have no right to use the Customer
Data except solely as necessary to perform its obligations to Playboy.com
hereunder. Infinity agrees that any use of Customer Data hereunder shall conform
with Playboy.com's privacy policy, as such policy may be revised from time to
time at Playboy.com's sole discretion, and that Infinity shall not knowingly
violate privacy and data protection laws, regulations, and policies applicable
to the gathering, processing, storing and transmitting of such Customer Data.
Without limiting the foregoing, Infinity will not use the Customer Data for the
purpose of sending or causing to be sent to any Customer any uninvited
solicitation in any form of media now known or hereafter developed. Customer
Data collected hereunder shall be deemed the Confidential Information of
Playboy.com. Notwithstanding the foregoing, the parties acknowledge that they
share some common customers and Infinity shall not be restricted from contacting
any customer whose information it acquires independently from its access to the
Customer Data.
8. Ownership; Liens.
8.1 Property. Except as agreed between the parties in writing,
or as expressly set forth in this Agreement, Playboy.com (or its licensors, as
applicable) shall own all right, title and interest in and to any and all
property provided to Infinity hereunder, and nothing contained in this Agreement
shall be deemed to transfer or convey to Infinity any right, title or interest
in or to any such or property by virtue of its use by Infinity in relation to
any Service provided hereunder.
8.2 Trademarks. Subject to the terms and conditions set forth
herein, Playboy.com hereby grants to Infinity, and Infinity hereby accepts, a
non-exclusive, royalty-free, non-transferable (without any right to sublicense),
limited license to use, publish and display such trademarks, service marks,
trade names, service names or other marks, registered or otherwise, as may be
provided by Playboy.com (collectively, the "Playboy.com Marks"), solely as
required to perform Infinity's obligations hereunder. All use by Infinity of the
Playboy.com Marks shall conform to the usage guidelines provided by Playboy.com,
which guidelines may be updated from time to time. In the event that Playboy.com
notifies Infinity of any incorrect usage of the Playboy.com Marks, Infinity
shall promptly correct such usage at its sole cost and expense.
(a) Playboy.com has certain rights to the Playboy.com
Marks
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licensed herein under an agreement between PEI and Playboy.com. PEI shall own
all right, title and interest in and to the Playboy.com Marks. Nothing contained
in this Agreement shall be deemed to transfer or convey to Infinity any
ownership rights whatsoever in and to the Playboy.com Marks, nor will Infinity
obtain any right, title or interest in the Playboy.com Marks by virtue of its
use under this Agreement. Infinity may not make any modifications or changes to
any Playboy.com Mark without the prior written consent of Playboy.com. Any
additional goodwill associated with the Playboy.com Marks that is created
through Infinity's use of the Playboy.com Marks shall inure solely to the
benefit of PEI, and PEI shall be the sole entity entitled to register the
Playboy.com Marks. All rights not specifically granted with respect to the
Playboy.com Marks herein are reserved by PEI or Playboy.com respectively.
8.3 During the Term of this Agreement, Infinity shall not
allow liens or encumbrances of any kind to be placed on any of the Products or
any additional property of Playboy.com in the possession of Infinity or located
at the Warehouse Facilities other than by Playboy.com
9. Representations and Warranties. Each of Infinity and Playboy.com
represents, warrants and covenants, as the case may be, to each other that: (i)
each party has the full power and authority to enter into and fully perform this
Agreement and perform the acts required of it hereunder; (ii) neither party has
entered into any other agreement, or has done or will do any act or thing which
in any way conflicts with or interferes with the full and complete performance
of it's respective obligations to the other party. Infinity represents,
warrants, covenants and agrees with Playboy.com that i) it will fully cooperate
with Playboy.com and will take all reasonable steps reasonably requested by
Playboy.com to protect its ownership and rights in and to Playboy.com's
Confidential Information, including, but not limited to, the Customer Data; (iv)
Infinity is the owner or has the rights and authorization to use, reproduce and
distribute all materials and methodologies, including third party computer
programs and/or technology used in connection with the Services; (iii)
Infinity's trademarks and methodologies, including but not limited to computer
programs and/or technology used in connection with the Services do not now, and
will not, infringe or misappropriate any copyright, patent, trademark, trade
secret, contract right or other third-party proprietary right or other rights of
any third party or entity; (vi) all obligations that Infinity owes to third
parties with respect to activities that Infinity may undertake in connection
with this Agreement are or will be fully satisfied so that Playboy.com will not
have any obligations with respect to them; (v) the Services provided by Infinity
shall conform to then current industry standards; and (vi) Infinity will comply
with all applicable federal, state, and local laws and regulations in the
performance of its obligations under this Agreement.
Playboy.com represents and warrants to Infinity that, to the best of
its knowledge, Playboy.com. Marks do not infringe or misappropriate any
copyright, patent, trademark, trade name, trade secret or other intellectual
property right of any third party. Playboy.com covenants and agrees with
Infinity that it will its use reasonable efforts through the Term to prevent any
such infringement or misappropriation from occurring.
10. Indemnification. Each party at its sole expense, will indemnify,
defend and hold the other party its parent, owners, subsidiaries and affiliates
and their directors, officers, shareholders, employees and agents harmless from
and against any claims, suits, losses,
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liabilities, injuries or damages (including, without limitation, reasonable
attorneys' fees and litigation expenses) arising out of or in connection with
(i) any breach by the other party of any of its covenants, representations or
warranties made in this Agreement; (ii) any alleged violation by a party of any
rules, laws and regulations; (iii) with respect to Infinity, any alleged action
or failure to act whatsoever in regard to Infinity's performance of its
obligations and duties under this Agreement, or the conduct of the Services. The
indemnified party shall: (x) promptly notify the indemnifying party in writing
of any such claim; (y) give the sole right to control and direct the
investigation, preparation, defense and settlement of such claim to the
indemnifying party (provided that the indemnify party may participate in such
defense with its own counsel and at its own expense); and (z) give reasonable
assistance and cooperation to the indemnifying party in any such settlement and
defense at no cost or expense to the indemnified party.
11. Limitation on Liability. Except as otherwise provided herein,
neither party shall have any liability whatsoever to the other party for any
error, act or omission in connection with the Services unless such error, act or
omission derives from willful misconduct or gross negligence. With the exception
of a party's indemnity obligations hereunder or for damages arising out of a
breach of a party's confidentiality obligations, no party will be liable to the
other party in tort, contract or under any other legal theory for any
consequential, indirect, incidental, punitive or special loss damages arising
out of this Agreement.
12. Relationship of Parties. Each party hereto is an independent
contractor and when its employees act under the terms of this Agreement, they
shall be deemed at all times to be under the supervision and responsibility of
such party; and no person employed by either party and acting under the terms of
this Agreement shall be deemed to be acting as agent or employee of such party
or any customer of such party for any purpose whatsoever. Neither of the parties
shall act or represent or hold itself out as having authority to act as an agent
or partner of the other party, or in any way bind or commit the other party to
any obligations. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture, agency, trust or other association of any
kind, each party being individually responsible only for its obligations as set
forth in this Agreement.
13. Financial Obligations.
13.1 Books and Records. From and after the date hereof,
Infinity shall maintain accurate and detailed records and accounts of all
transactions relating to the Services (the "Records") performed hereunder, and
shall allow Playboy.com or its representatives access to such records upon
reasonable notice and during normal business hours to audit or check the
accuracy of such Records. Infinity shall promptly deliver to Playboy.com, at
Playboy.com's expense, copies of any such Records in the possession of Infinity
reasonably requested by Playboy.com.
13.2 Audit of Products and Inventory Records. In
addition to Playboy.com's rights to inspect Products upon receipt pursuant to
Section 2.2(c), Playboy.com may inspect Products after receipt and examine
Infinity's records pertaining to inventory under this Agreement during normal
business hours and upon not less than a two (2) Business Days' prior written
notice to Infinity.
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13.3 Infinity Financial Statements. Subject to the
provisions of Section 7.1 hereof , Infinity shall provide Playboy.com with
audited annual financial statements not later than ninety (90) days following
Infinity's year-end.
13.4 Accounting Report. Infinity shall provide, at its
sole expense, a SAS 70 Type II Report to Playboy.com or its Affiliates (or such
alternative report that may be acceptable to Playboy.com or its Affiliates as
set forth below in this Section) for the one-year period ending September 30th
of each year by December 31st of each year of the Term. Notwithstanding the
foregoing, Playboy.com and its Affiliates shall not, in good faith, require
Infinity to provide a report that is substantially more comprehensive than that
required to comply with its Section 404 requirements under the Sarbanes-Oxley
act of 2002.
14. Force Majeure. Infinity shall be temporarily excused from
providing the Services, and Playboy.com shall be excused from any payment for
such Services, during the period of an applicable Force Majeure event. In the
event of any Force Majeure event lasting more than ten (10) Business Days,
Playboy.com may, at its sole discretion, immediately terminate this Agreement
upon written notice, without penalty.
15. Miscellaneous.
15.1 Definitions. As used in this Agreement, the following
terms have the following meanings.
"Affiliate" means any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, and the rules and regulations promulgated thereunder.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of Illinois are authorized or
required by law or executive order to close. For purposes of this Agreement,
Playboy.com's Business Day ends at 6:00 PM (Central Time).
"CPI" means the Consumer Price Index - All Urban Consumers (all
items) for the United States as published by the U.S. Department of Labor,
Bureau of Labor Statistics.
"Customer Data" means any information provided by, or concerning,
any customer of Playboy.com.
"Direct Commerce" means the sale and promotion of branded products
and services via mail and other direct marketing efforts.
"Direct Commerce Contact" means a Customer interaction with Infinity
via telephone relating to a Call Category (as defined in Exhibit D).
"Direct Commerce Mail Contact" means a Customer interaction with
Infinity via mail.
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"Direct Commerce Orders" means orders received offline from
Customers of Playboy.com's Direct Commerce business.
"E-Commerce" means conducting any of the following using or via
communications involving the TCP/IP Protocol or any TCP/IP Successors: (i)
promoting, offering, providing or selling goods, (ii) promoting, offering,
providing or selling services including, but not limited to, auctions,
electronic payments, travel and other ticket sales, classified ads, Internet
service provider services, pay-per-view or pay-per-use services, gambling and
gaming, and on-line community services (which include, but are not limited to,
e-mail, chat, bulletin boards, directories, databases, and personal or shared
calendar or address books), or (iii) providing hypertext links to Web sites that
provide any of the foregoing.
"E-Commerce Contact" means a single Customer interaction with
Infinity via email associated with an E-Commerce Order.
"E-Commerce Orders" means orders received from Customers of
Playboy.com's E-Commerce business.
"High Risk Products" means Products designated by Playboy.com as
delicate, expensive or susceptible to theft.
"Force Majeure" means any cause or condition beyond Infinity's
reasonable control, including, without limitation, to acts of God or of the
public enemy; acts of any federal, state or local government or agency; fires;
floods; epidemics; quarantine restrictions; strikes and labor disputes; war;
acts of terrorism; failure of communications capabilities; earthquakes or
general unavailability of energy or materials.
"Governmental Body" means any foreign or domestic, federal,
territorial, state or local government authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization, commission,
tribunal or organization or any regulatory, administrative or other agency, or
any political or other subdivision, department, board, bureau or branch or
official of any of the foregoing.
"Order Management System" means Infinity's current inventory and
customer order system or any successor system.
"PEI" means Playboy Enterprises, Inc., a Delaware corporation, and
any successor to such entity.
"Person" means any individual, corporation, partnership, firm, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Purchase Order System" means Infinity's current purchase order
dispatch and receiving system or any successor system.
"Services" means all services provided by Infinity hereunder.
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"Substantially" means in respect of a given Service, ninety-seven
percent (97%) of the respective Service Performance Level set forth on Exhibit
C.
"Unmerchandisable Products" means Products that are shopworn and/or
soiled.
"Warehouse Facilities" means one (1) or more of Infinity's warehouse
facilities as Infinity may from time to time designate.
15.2 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or overnight courier,
postage prepaid. Any such notice shall be deemed given when so delivered
personally, or sent by facsimile transmission, if delivered by commercial
overnight courier service, one (1) day after delivery or, if mailed, five (5)
days after the date of deposit in the United States mails, as follows:
(i) if to Infinity, to:
Infinity Resources, Inc.
900 Rohlwing Road
Itasca, Illinois 60143
Attention: Dennis E. Abboud
Facsimile: (630) 775-3340
with a copy to:
Huff & Gaines
10 South La Salle Street, Suite 3500
Chicago, Illinois 60603-1002
Attention: John J. Gaines III, Esq.
Facsimile: (312) 606-0027
(ii) if to Playboy.com, to:
Playboy Enterprises, Inc.
680 North Lake Shore Drive
Chicago, Illinois 60611
Attention: Howard Shapiro, Esq.
General Counsel
Facsimile: (312) 266-2042
AND
Playboy.com, Inc.
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730 Fifth Avenue
New York, New York 10019
Attention: Randy Nicolau
President
Facsimile: (212) 957-2931
Either party may, by notice given in accordance with this Section 15.2 to the
other party, designate another address or Person for receipt of notices
hereunder.
15.3 Entire Agreement. This Agreement (including the
Exhibits) contains the entire agreement among the parties with respect to the
transactions contemplated hereby and supersedes all prior agreements, written or
oral, with respect thereto.
15.4 Waivers and Amendments; Non-Contractual Remedies.
This Agreement may be amended, superseded, canceled, renewed or extended, and
the terms hereof may be waived, only by a written instrument signed by the
parties hereto or, in the case of a waiver, by the party waiving compliance. No
delay on the part of either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
either party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
15.5 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal representatives. This Agreement is not assignable except by
operation of law, except that Playboy.com or Infinity may assign this Agreement
to any of its Affiliates or to any successor to all or substantially all of its
business or assets.
15.6 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto. The parties hereto confirm that any facsimile copy of another
party's executed counterpart of this Agreement (or the signature page thereof)
shall be deemed to be an executed original thereof.
15.7 Exhibits. The Exhibits are a part of this Agreement
as if fully set forth herein. All references herein to Sections and Exhibits
shall be deemed references to such parts of this Agreement, unless the context
shall otherwise require.
15.8 Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
15.9 Interpretation. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in the masculine, the
feminine or neuter gender shall include the
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masculine, the feminine and the neuter.
15.10 Certain Acknowledgments. Each of the parties
hereto acknowledge that it has been represented by legal counsel of its own
choice throughout all negotiations and preparation and review of this Agreement,
and that it has executed this Agreement voluntarily. Each of the parties hereto
acknowledge that it is sophisticated in transactions of the type contemplated by
this Agreement and each party wishes to create a relationship based on the terms
set forth in this Agreement.
15.11 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the parties hereto directs that such court
interpret and apply the remainder of this Agreement in the manner that it
determines most closely effectuates their intent in entering into this
Agreement, and in doing so particularly take into account the relative
importance of the term, provision, covenant or restriction being held invalid,
void or unenforceable.
15.12 Survival. The provisions of Sections 6.5 (Notice
of Termination), 6.6 (Effect of Termination), 7 (Confidentiality), 8.1
(Ownership of Equipment and Property), 8.2(a) (Ownership of Trademarks), 10
(Indemnification), 11 (Limitation of Liability), 13.1 (Books and Records), 13.2
(Audit of Products and Inventory Records), and 15 (Miscellaneous) hereof shall
survive any termination of this Agreement.
15.13 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Illinois applicable to
agreements made and to be performed entirely within such State.
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IN WITNESS WHEREOF, the parties have executed this Fulfillment and
Customer Service Services Agreement on the date first above written.
INFINITY RESOURCES, INC.
By: /s/ Dennis Abboud
-------------------------------
Name: Dennis Abboud
Title: CEO
PLAYBOY.COM, INC.
By: /s/ Howard Shapiro
-------------------------------
Name: Howard Shapiro
Title: V.P.
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