Servicing, Warehousing & Distribution Agreement [Amendment No. 1] - 3PF.com Inc., Rentrak Corp. and Red Envelope Inc.
Revised 6/14/02
AMENDMENT NO. 1 TO
SERVICING, WAREHOUSING & DISTRIBUTION AGREEMENT
THIS AMENDMENT NO. 1 is made as of June 18, 2002, between
3PF.COM, INC., a Delaware corporation, having an address at 3300 State Route 73,
South Building 5, Wilmington, Ohio 45177 ("3PF"), RENTRAK CORPORATION, a
Delaware corporation and parent corporation of 3PF ("RENTRAK"), and RED
ENVELOPE, INC., a Delaware corporation, having an address at 201 Spear Street,
3rd Floor, San Francisco, California 94105 ("CUSTOMER").
RECITALS:
A. Pursuant to Servicing, Warehousing & Distribution
Agreement, dated October 1, 2001, between 3PF, Rentrak and Customer (the
"FULFILLMENT AGREEMENT"), 3PF provides certain warehousing, management,
distribution and inventory services to Customer.
B. Concurrently with entering into this Amendment, 3PF
and Customer have entered into a certain Sublease Agreement of even date
herewith (the "SUBLEASE") by which 3PF has subleased to Customer a certain
warehousing facility located at Creekside Industrial Center, Obetz, Ohio (the
"SUBLEASED FACILITY").
C. Also concurrently with entering into this Amendment,
3PF and Customer have entered into a certain Equipment Lease Agreement of even
date herewith (the "EQUIPMENT LEASE") by which 3PF has leased to Customer
certain equipment (the "LEASED EQUIPMENT") to be used to warehouse, service and
distribute Customer's Stock (as defined below).
D. Customer intends upon the Term Commencement Date (as
defined in the Sublease) to transfer to the Subleased Facility all of its goods
and merchandise (the "STOCK") which it currently warehouses at the Wilmington,
Ohio facility under the terms and conditions of the Fulfillment Agreement.
E. 3PF and Customer desire to amend the Fulfillment
Agreement, effective as of the Term Commencement Date, to reflect the change in
warehouse location, the Sublease and Equipment Lease and to eliminate the
facility and equipment charges.
F. 3PF and Customer desire to make certain additional
modifications to the Fulfillment Agreement, effective as of the date hereof.
NOW, THEREFORE, for valuable consideration as set forth in the
Fulfillment Agreement and the mutual benefits to be derived therefrom, 3PF and
Customer agree as follows:
1. Effective as of the Term Commencement Date, Section
1.1 of the Fulfillment Agreement is amended to delete references to 3PF's
provision of warehouse space insofar as Customer will use its Subleased
Facility as its warehouse, and will read in its entirety as follows:
<PAGE>
"Warehousing Services: 3PF agrees to provide certain warehouse
management, servicing, inventory and distribution services to
Customer as set forth herein. The warehouse space shall be
located at Customer's Subleased Facility, and Customer agrees
that it shall comprise not less than 194,000 square feet of
such facility. Subject to the terms of the Sublease, Customer
shall maintain the facility structurally and mechanically in
good working order and shall pay all common area maintenance
charges, real estate taxes, unless abated by taxing
authorities, HVAC, electrical, plumbing and water, security,
insurance, janitorial and supplies, continuance of existing
Internet access, and trash removal with respect to the
Subleased Facility. 3PF shall not be required to pay any
expenses in connection with the maintenance or operation of
the Subleased Facility except as expressly set forth herein or
in the Sublease."
2. Effective as of the Term Commencement Date, Section
1.2 of the Fulfillment Agreement is amended to delete references to 3PF's
provision of warehousing equipment insofar as Customer will use the Leased
Equipment, and will read in its entirety as follows:
"Equipment: Subject to the terms of the Equipment Lease,
Customer agrees to make available to 3PF the Leased Equipment
in the Subleased Facility, including not less than 620 bays of
pallet rack, 32 bays of flow rack, 1 forklift, 1 drexel truck,
4 order pickers and 6 pallet trucks. Subject to the terms of
the Equipment Lease, Customer assumes full responsibility for
all Leased Equipment and shall provide all maintenance and
replacement of the Leased Equipment if any of it is no longer
fully operational at any time during the term of this
Agreement. 3PF shall exercise reasonable care in the use and
custody of such Leased Equipment and shall use such Leased
Equipment only in performing its obligations under this
Agreement. 3PF will provide various smaller pieces of
equipment which include but are not limited to: tape guns, air
pillow machines, movable conveyor, jewelry storage lockers,
security cameras, employee lockers, kitchen facilities, and
such items as are adequate to support the order/fulfillment
volume projected for Customer's Christmas CY2002 season. These
smaller pieces of equipment, may remain in place in the
Subleased Facility at the end of the term of this Agreement
upon terms mutually agreeable to Rentrak and Customer."
3. Effective as of the Term Commencement Date, Section
1.3 Additions is deleted in its entirety.
4. Effective as of the Term Commencement Date, Section
1.4 Additional Space is deleted in its entirety.
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<PAGE>
5. Effective as of the date hereof; Section 1.5
Instructions; Shipments is amended to add the following sentence:
"Notwithstanding anything stated herein to the contrary, 3PF
and Customer agree that the earliest cut-off time for Airborne
carrier services shall be 11:00 p.m."
6. Effective as of the Term Commencement Date, Section
2.6 Abandonment is deleted in its entirety.
7. Effective as of the Term Commencement Date, the first
sentence of Section 4.2 Stock from Vendors shall be amended to read as follows:
"All Stock submitted for 3PF's services under this Agreement
shall be delivered at Customer's expense to Customer's dock
at: Creekside Industrial Center, Village of Obetz, Ohio, 4000
Creekside Parkway, Lockbourne, Ohio 43137."
8. Effective as of the date hereof, Section 4.2 Stock
from Vendors is amended to add the following sentences:
"Prior to the Term Commencement Date, 3PF, at 3PF's expense,
shall transfer a sufficient quantity of Customer's Stock
located at the Facility to the Subleased Facility such that on
the Term Commencement Date, and for a period of at least
thirty (30) days thereafter, 3PF can fully perform its
services under this Agreement at the Subleased Facility.
Within fifteen (15) days after the Term Commencement Date,
3PF, at 3PF's expense, shall transfer the remaining Stock
located at the Facility to the Subleased Facility."
9. Effective as of the Term Commencement Date, Section
4.5 shall be amended to read in its entirety as follows:
"Facility Access. Employees of 3PF and Customer with proper
identification and proof of employment shall be allowed free
access to the Subleased Facility at any time. Customer agrees
to provide reasonable prior notice (except in the event of an
emergency, in which case no prior notice shall be required) of
any warehouse visitors who are not employees of Customer. Such
prior notice shall be required solely for the purpose of
ensuring that only individuals authorized by Customer are
granted access to the Subleased Facility. In the event any
employee, visitor, contractor or other person under the
direction of Customer violates any employee or visitor
policies of 3PF, including but not limited to creating a
danger to other employees, causing harassment of employees, or
disturbing the operation of 3PF, 3PF in its reasonable
discretion shall have the right to have such employee removed
from the Subleased Facility immediately."
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<PAGE>
10. Effective as of the Term Commencement Date, Section
5.5 Warranties; Representations; and Indemnity shall be amended to read in its
entirety as follows:
"Warranties; Representations; and Indemnity. 3PF represents
and warrants that: (1) the services provided hereunder will be
performed in a professional manner by qualified, competent
personnel and in accordance with generally accepted industry
standards applicable to such services; and (2) the performance
by 3PF of its obligations under this Agreement will not cause
3PF to be in breach of any agreement by which it is bound. 3PF
and Customer shall defend, indemnify and hold each other
harmless against any and all losses, costs, damages and
liabilities, including without limitation reasonable
attorneys' fees, arising out of any breach by either party of
their representations, warranties or obligations under this
Agreement."
11. Section 6.5 Taxes shall be subject to the terms of
the Sublease defining Customer's obligation to pay real property taxes, personal
property taxes and inventory taxes to the extent such taxes are not abated
pursuant to certain abatement agreements, copies of which are attached to the
Sublease as Exhibit G.
12. Effective as of the Term Commencement Date, Section
6.8 shall be amended to read in its entirety:
"Non-Solicitation. Customer and 3PF agree that neither party
nor its Representatives will hire, employ or solicit for
employment, directly or indirectly, during the term of this
Agreement, any employees of the other party without the prior
written consent of the other party, which consent may be
withheld in its sole discretion. Notwithstanding the
foregoing, Customer shall have the right to approach 3PF
employees for employment opportunities with Customer, on a
basis agreeable to 3PF, for any period of time beyond the
scheduled termination date of the Agreement. For purposes of
this Section 6, employees shall include all employees of 3PF
or Customer as of the date of this Agreement and all new
employees of 3PF and Customer that become employees after the
date hereof up until the expiration of the no solicitation
period provided for in this Section 6."
13. Effective as the Term Commencement Date, Section 8.2
Customer Payment shall be deleted in its entirety.
14. Effective as of the Term Commencement Date, the Rate
for Facility Charge of $[*] per month set forth in Schedule 1.1 to the
Fulfillment Agreement is eliminated and the term "Facility" defined therein
shall mean the Subleased Facility.
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* Material has been omitted pursuant
to a request for confidential treatment.
<PAGE>
15. Effective as of the date hereof, the Engraving and
Personalization Charge set forth in Schedule 1.1 to the Fulfillment Agreement is
modified to provide a per item charge of [*] ($[*]).
16. Except as modified and amended herein, the Fulfillment
Agreement shall remain in full force and effect.
[Intentionally Blank; Signature Pages Follow]
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* Material has been omitted pursuant
to a request for confidential treatment.
<PAGE>
The parties hereto have caused this Amendment to be executed
as of the date first above written.
3PF.COM, INC.,
a Delaware corporation
By: /s/ [ILLEGIBLE]
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Its: CHIEF FINANCIAL OFFICER
RED ENVELOPE, INC.,
a Delaware corporation
By: /s/ Alison May
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Its: CEO + Pres
With respect to Section 8.1 of the Fulfillment Agreement only:
RENTRAK CORPORATION
a Delaware corporation
By: /s/ [ILLEGIBLE]
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Its: CHIEF FINANCIAL OFFICER
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