[GRAPHIC OMITTED]
June 1, 2000
SYSTEM UNIT
FGI Print Management/Distribution and Fulfillment Division
INVENTORY MANAGEMENT AGREEMENT
THIS INVENTORY MANAGEMENT AGREEMENT is made and entered into by and between
FGI Print Management Inc., an Illinois Corporation ("FGI"), and MYTURN.COM, INC.
("MUTURN.COM").
RECITALS
A. FGI is in the business of inventory management, specializing in
providing warehousing, retail and consumer order fulfillment, order and returns
processing, and specialty retail distribution services.
B. MYTURN.COM is engaged in, among other things, the creation, production
marketing and a sale of a computer hardware product, a PC/Keyboard (The
"Product"). MYTURN.COM is headquartered in, and conducts its business activities
primarily from 1080 Marina Village Parkway, suite 300, Alameda, California,
94501
C. MYTURN.COM wishes to retain FGI to perform certain services referred to
herein, and FGI wishes to provide such services to MYTURN.COM, in accordance
with the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, based upon the premises recited above and on the mutual
promises and covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which each party acknowledges, the
parties do hereby agree as follows:
1. Specified Services.
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MYTURN.COM hereby retains FGI to perform, and FGI hereby agrees to
render to MYTURN.COM, when and as requested by MYTURN.COM, the following
services: product warehousing, fulfillment, order processing, inventory
management, and returns processing in North America and U.S. territories.
2. Costs.
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a) Costs: In consideration for FGI Services, MYTURN.COM shall pay FGI
the rates and charges set forth in SCHEDULE A hereto, which by this
reference is incorporated herein.
b) Terms: FGI's charges to MYTURN.COM shall be due and payable net
thirty (30) days after the date upon which MYTURN.COM receives FGI's
invoice.
c) Late Payment Fee: A service charge of 1.5% per month shall accrue
as a late payment fee on any balance remaining unpaid after the due date
specified in paragraph (b), above unless a reasonable dispute over the
invoice exists between the parties.
3. Agreement Terms and Conditions:
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a) Agreement Term: This Agreement shall commence as of the date of its
execution and will terminate one year thereafter, unless otherwise extended
by the mutual consent of both parties.
b) Termination: Either party shall have the right to terminate this
Agreement without cause at any time upon ninety (90) days written notice to
the other party.
c) Termination by Material Breach: Either party shall have the right
to terminate this Agreement 30 days after providing written notice to the
other party in the event of any material breach of any term or condition of
this Agreement by the other party, unless such breach has been remedied
within thirty (30) days after the date on which that notice is deemed
received.
d) Other Events: Either party shall have the right to terminate this
Agreement immediately upon written notice to the other party, in the event
the other party shall be adjudicated a bankrupt, institute voluntary
proceeding for bankruptcy or reorganization, make an assignment for the
benefit of its creditors, apply for or consent to the appointment of a
receiver for it or its property, or admit in writing its inability to pay
its debts as they become due.
e) Termination Protocol: FGI shall return to MYTURN.COM by common
carrier at MYTURN.COM'S expense any Products remaining in FGI's possession
following termination of this Agreement unless the parties mutually agree
in writing to other procedures.
f) Exclusive Right: During the term of this Agreement, FGI shall have
the exclusive right to perform the services defined in the Agreement of
shipments which have a destination within the United States.
4. Receipt and Inspection.
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a) Inspection Upon Delivery: Upon delivery of Products from MYTURN.COM
or its agents, FGI shall:
i) promptly unload the Products;
ii) visually inspect the outside of the shipping containers for
any noticeable damage, and note the damage on the shipping documents
tendered by the carrier;
iii) except for products returned because they are damaged,
reject and return to the carrier in appropriate containers any
apparently damaged Products; and
iv) promptly report to MYTURN.COM in writing any damaged Products
discovered by FGI or returned by others and any shortages in
quantities of Products received.
b) Subsequently Discovered Damage: FGI shall report to MYTURN.COM in
writing any damage to Products FGI may discover subsequent to FGI's
acceptance thereof from the carrier, promptly after discovering such
damage.
c) Limited Liability for Non-Discoverable Damages: FGI shall not be
obligated to inspect or test Products for defects or for any damage to
Products not reasonably discoverable by external visual inspection of the
shipping containers at the time of its receipt of delivery of the Products.
5. Storage.
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a) Transfer of Products: Prior to final shipment of the Products
pursuant to MYTURN.COM'S instructions, FGI shall have the right to transfer
Products within a given warehouse complex and to other warehouses or
facilities owned, leased or managed by FGI for its convenience in
performing the Services, subject to MYTURN.COM'S instructions referred to
in Section 6. FGI shall notify MYTURN.COM in writing prior to moving
Products to a different warehouse.
b) Security: FGI shall store, and shall exercise reasonable care in
storing and safeguarding all products from damage, loss or theft. FGI has
in place a sprinklered, video secured distribution center to ensure product
safety. Reports, describing or itemizing Products in FGI'S possession,
which may be prepared in connection with the performance of the Services
shall not comprise documents of title.
c) Right to Inspect: MYTURN.COM shall have the right from time to time
to inspect Products stored by FGI and their storage conditions during
normal business hours upon providing two (2) days advance notice to FGI.
d) Title: FGI shall execute and deliver to MYTURN.COM such documents
of title, warehouse receipts and other similar documents and instruments as
MYTURN.COM may reasonable request from time to time in order to document
and otherwise assure and validate MYTURN.COM' s ownership interest in
Products received by FGI under the terms of this Agreement.
e) Separate Storage: FGI shall at all times store MYTURN.COM'S
products in such a manner that they are unmixed with and separate from
products belonging to FGI or any of its other customers, and shall not
indicate to any third party that MYTURN.COM'S products in its possession
are the property of FGI, additionally, FGI shall clearly designate that the
Products are owned by MYTURN.COM. Except as may be required to permit FGI
to carry out the purposes of this Agreement or by applicable law, FGI shall
not, without MYTURN.COM'S prior written consent, permit any third party to
examine or remove any property of MYTURN.COM held by FGI from its
possession.
6. Shipping.
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a) Shipments to FGI: MYTURN.COM shall bear the cost of shipment of
Products to FGI.
b) Shipping Instructions: MYTURN.COM shall provide FGI written
instructions, which, FGI shall receive and promptly process, as to FGI's
reshipment and delivery of the Products, including without limitation
delivery points and , if desired by MYTURN.COM, any instructions related to
selection of carriers and transport insurance coverage to be purchased on
MYTURN.COM'S behalf. MYTURN.COM shall have the right to change the
instructions by written notice to FGI within five (5) days prior to the
scheduled shipment date.
c) Fulfillment: FGI shall follow and fulfill, and shall exercise due
care in following, MYTURN.COM'S instructions, to the extent possible,
within the time or times specified by MYTURN.COM (provided that the time or
times so specified are commercially reasonable in light of all of the
circumstances) and in a manner consistent with acceptable commercial
practice with respect to the physical protection of the Products.
d) FGI Error: In the event of error on the part of FGI in shipping the
proper numbers and types of Products to the proper destinations at the
proper times according to MYTURN.COM'S instructions, FGI shall, to the
extent commercially practicable, recover the mis-shipped Products and
return them to its warehouse at its own expense and/or make a replacement
shipment free of charge to MUTURN.COM for freight, order processing, and
handling, as appropriate.
e) Damage Occurring Before Delivery or After Shipment: FGI shall not
be liable for loss or damage to the Products prior to their delivery to FGI
or after they are loaded on the carrier for delivery pursuant to
MYTURN.COM'S written instructions.
FGI SHALL NOT BE RESPONSIBLE FOR ANY ACT OR FAILURE TO ACT OF ANY CARRIER, OR
LATE OR IMPROPER DELIVERY, OR DAMAGE OR LOSS OF PRODUCTS BY ANY CARRIER, UNLESS
THE LOSS OR DAMAGE RESULTS FROM FGI'S FAILURE TO EXERCISE THE CARE AND DILIGENCE
REQUIRED OF IT BY THE TERMS OF THIS AGREEMENT. MYTURN.COM'S REMEDIES FOR LATE OR
IMPROPER DELIVERY OF INVENTORY DUE SOLELY TO THE FAULT OF ANY CARRIER SHALL BE
SOLELY FROM THE CARRIER, REGARDLESS OF WHO SELECTS THE CARRIER OR PAYS THE
CARRIER=S CHARGES.
7. Liability.
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a) Liability Limitations: FGI'S LIABILITY TO MYTURN.COM FOR LOSS OF OR
DAMAGE TO PRODUCTS SHALL BE LIMITED TO LOSS OR DAMAGE WHICH RESULTS FROM
FGI'S NEGLIGENT OR WILLFUL ACT OR OMISSIONS OR ACTS OCCURRING DURING TIME
THAT FGI HAS EFFECTIVE PHYSICAL POSSESSION OR CONTROL OF THE PRODUCTS, AND
SHALL NOT IN ANY EVENT EXCEED THE LESSER OF:
I) THE ACTUAL COST OF REPAIRING DAMAGED PRODUCTS TO MAKE THEM
SALEABLE TO MYTURN.COM'S CUSTOMERS WITHOUT ANY DISCOUNT RELATING TO
THE DAMAGE AND REPAIR;
II) THE COST TO REPLACE DAMAGED, LOST OR DESTROYED PRODUCTS WITH
PRODUCTS OF LIKE KIND AND QUALITY;
b) Events Beyond FGI's Control: FGI SHALL NOT BE LIABLE FOR LOSS,
INJURY, DAMAGE, OR DELAY CAUSED BY OR RESULTING FROM RIOTS, STRIKES,
INSURRECTIONS; ACTS OR OMISSIONS OF MYTURN.COM; INHERENT OR PERISHABLE
QUALITIES OF THE PRODUCTS; OR OTHER CAUSES BEYOND FGI'S REASONABLE CONTROL.
FGI SHALL NOT BE LIABLE BEYOND THE AMOUNT OF ITS AVAILABLE INSURANCE, AS
DESCRIBED IN SECTION 11 BELOW, PROVIDED IT HAS SUCH INSURANCE, FOR LOSS OR
DAMAGE CAUSED BY FIRES, FROST, OR CHANGE IN WEATHER; LEAKAGE, PILFERAGE,
THEFT, VERMIN, OR WATER UNLESS SUCH CAUSE RESULTS FROM FGI'S FAILURE TO
EXERCISE THE CARE AND DILIGENCE REQUIRED OF IT BY THE TERMS OF THIS
AGREEMENT.
8. FGI's Indemnification.
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Except as limited by Sections 6(d), (e) and 7, above, FGI shall
indemnify and defend MYTURN.COM and its officers, directors, agents and
employees against, and hold them harmless from and against, all claims, suits,
losses, liabilities, damages or expenses, including without limitation storage,
transportation and similar charges, costs of litigation (including appeal) and
reasonable attorney's fees, arising from or in connection with any of the
following:
i) any action taken or failure to act by FGI which constitutes
a breach of this Agreement or any breach by FGI of a representation of FGI set
forth herin;
ii) any claim, proceeding, investigation, or other action
taken or threatened against MYTURN.COM by any customer, supplier, employee, or
agent of FGI, or any of their respective officers, directors, agents, or
employees which causes MYTURN.COM actual loss; or
iii) any action taken or failure to act by FGI or on its
behalf which constitutes deliberate and willful misconduct or gross negligence
on the part of FGI or its employees or agents.
Pending any final determination of any such claims, suits, losses,
liabilities, damages or expenses, MYTURN.COM shall pay any amount otherwise due
FGI under the terms of the Agreement into an escrow account with a third party
mutually acceptable to FGI and MYTURN.COM
9. MYTURN.COM Representations and Indemnification.
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a) Representations and Warranties: MYTURN.COM represents and warrants
to FGI that:
i) MYTURN.COM has, or will upon delivery of the Products to FGI
and at all relevant times thereafter have, the lawful possession
(subject to FGI's bailment) of, and the legal right and authority to
store, deliver and/or direct the delivery of, all Products, which
MYTURN.COM may deliver or cause to be delivered to or managed by FGI
pursuant to this Agreement.
ii) The Products, to MYTURN.COM'S best knowledge, shall not
comprise or contain any explosive, toxic, or hazardous substances or
materials, or any contraband.
iii) The Product shall be in substantial compliance with all
state and federal laws, rules, and regulations.
b) Indemnity: MYTURN.COM shall indemnify and defend FGI and its
officers, directors, agents and employees, and hold them harmless from and
against, all claims, suits, losses, liabilities, transportation, and
similar charges, costs of litigation (including appeal), and reasonable
attorney's fees, arising from or in connection with any of the following:
i) Any action taken or failure to act by MYTURN.COM which
constitutes a breach of this Agreement of any breach by MYTURN.COM of
a representation of MYTURN.COM set forth in paragraph 9; or
ii) any third party claims, demands, or other assertions of
rights adverse to the ownership and possession rights of MYTURN.COM in
the stored goods which may be incurred by FGI, whether in defending
against any actual or threatened litigation or adverse claims or
otherwise
iii) Any third party claim, demand, or other assertion of rights
or claims regarding the quality or performance of any of the Products.
c) any claim of indemnity by FGI must be promptly presented in writing
to MYTURN.COM. MYTURN.COM shall have the right to exclusively choose and
direct legal counsel in the settlement or compromise of any identifiable
claim or judgments. FGI agrees to provide its reasonable cooperation at
MYTURN.COM'S expense.
In the event of any adverse claim or demand concerning the ownership or right of
possession of the stored goods, FGI is specifically authorized, at its option,
to interplead MYTURN.COM and all such other claimants.
10. Mutual Representation and Warranties.
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Each party hereto represents and warrants to the other that:
a) Such party has the power and authority to enter into this Agreement
and to carry out its obligations hereunder;
b) Such party has duly executed and delivered this Agreement, and this
Agreement comprises its valid, legally binding and enforceable obligation
in accordance with its terms; and
c) No consent of any person or entity not a party to this agreement is
required or necessary for such party to carry out its obligations
hereunder.
11. Insurance.
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FGI will at all times while MYTURN.COM's Products are in FGI's
possession carry insurance, "ALL RISK" Comprehensive General Liability. Coverage
is currently available on commercially reasonable terms, including fire,
sprinkler leakage, theft, and extended coverage insurance, on all Products while
in FGI's care, custody, and control, subject to the ordinary exclusions,
limitations, and conditions of such policies. The stated insurance coverage will
be in an amount not less than Ten Million Dollars ($10,000,000). FGI will
provide MYTURN.COM with certificates of insurance confirming coverage, with 30
days notice of cancellation and naming MYTURN.COM as an additional insured.
12. General.
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a) Amendment; Waiver: No amendment or modification of this Agreement
may be made except by an instrument in writing signed by both parties
hereto. No waiver of any obligation by a party hereto shall be effective
unless in writing, specifying the waiver, executed by the party making the
waiver. Except as explicitly stated to the contrary therein, a waiver by a
party hereto of any of its rights or remedies under this Agreement on any
occasion or of any other right or remedy at any time.
b) Independent Contractor Status: MYTURN.COM and FGI are and at all
times shall remain independent contractors as to each other. No joint
venture, partnership, agency, or other relationship, which would impose
liability upon one party for the act or failure to act of the other shall
be created or implied by or from this Agreement. Each party acknowledges
that to its knowledge, none of its respective officers, directors,
employees, or agents are covered under any employee benefit plans of the
other party. Except as otherwise expressly set forth herein, each party
shall bear full and sole responsibility for its own expenses, liabilities,
trade creditors, employees, costs of operation, and the like. Neither party
has or shall have the power to bind the other party or to assume or create
any obligation or responsibility, express or implies, on behalf or in the
name of the other party.
c) Nondisclosure: FGI acknowledges that the following are confidential
and proprietary information of MYTURN.COM; (i) the type and amount of the
Products received by FGI; (ii) MYTURN.COM's pricing information regarding
the Products or the Services, as applicable; and (iii) any other unilateral
information regarding a party which it discloses to the other but which is
not held in confidence and not to report, publish, disclose or transfer any
such confidential and proprietary information to any person or entity
without the other party's prior direction or consent, unless required to do
so by applicable law or regulation or in furtherance of its obligations
hereunder. However, nothing in this Agreement shall obligate FGI to
construct or erect a separate storage area or enclosure in order to conceal
the Products in its warehouse from view.
d) No Public Announcements: Neither party shall make any public
announcement or press release regarding this Agreement or the business
relationship between the parties without the written consent of the other
party, except that MYTURN.COM may make such announcements or press release
if it is required to do so in order not to violate any securities laws,
rules and regulations, or the rules or regulations of any stock exchange
upon which MYTURN.COM's securities are listed or included.
e) Entire Agreement: This Agreement constitutes the entire subject
matter hereof. It supersedes all prior negotiations, letters, agreements
and understandings relating to the subject matter hereof, including,
without limitation, any previous transport, storage, or warehousing orders
of MYTURN.COM.
f) Notices: Any notice to be given pursuant to this Agreement shall be
in writing and shall be deemed to have been given at the time when
delivered in person or via messenger to the persons identified below, or
upon the earlier of (i) actual receipt by the addressee; or (ii) five (5)
days after deposit in the U.S. mail, when sent postage prepaid and
addressed to the intended recipient at the applicable address appearing
below, or such other address as the recipient party hereto shall have
designated by notice to the other party pursuant to this subsection.
If to MYTURN.COM, notices shall be sent to:
MYTURN.COM
Attn: Clark Murray
1080 Marina Village Parkway
Suite 300
Alameda, CA 94501
Phone: (510) 814-4945
Fax No: (510) 814-4289
If to FGI, notices shall be sent to:
FGI Print Management
Attn: Pete Walters
4170 Business Center Drive
Fremont, CA 94538
Phone: (510) 656-9767
Fax No: (510) 656-0393
g) Assignment: This Agreement may not be assigned by FGI hereto
without the prior writ-ten consent of MYTURN.COM which shall not be
unreasonably withheld.
h) Governing Law: This Agreement is to be governed by Illinois without
reference to the choice of law provisions thereof, as such law is applied
to agreements between Illinois residents entered into in Illinois and to be
performed entirely in that State. The parties further agree that any
dispute arising under this agreement shall be resolved through binding
arbitration in accordance with the commercial rules of The American
Arbitration Association. Said arbitration shall be conducted in Chicago, IL
before a single, mutually acceptable arbitrator. The arbitrator shall have
the authority to award the prevailing party its reasonable attorneys fees
and costs.
i) Partial Invalidity: If the application of any provision or
provisions of this Agreement to any particular facts or circumstances shall
be held to be invalid or unenforceable by any court of competent
jurisdiction, then the validity and enforceability of such provision or
provisions as applied to any other particular facts or circumstances, and
the validity of other provisions of this Agreement shall not in any way be
affected or impaired thereby.
j) Binding Effect; No Third-Party Rights: This Agreement is entered
into for the benefit of the parties and no provision hereof shall be
interpreted or construed as creating any right of enforcement or cause of
action on the part of any person who is not a party hereto.
k) Number and Gender: Words used in this Agreement, regardless of the
number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context indicates is appropriate.
l) Costs and Expenses: Each party hereto agrees to pay its own costs
and expenses, including legal, accounting, consultant, and adviser fees,
incurred in negotiating this Agreement and consummating the transactions
described herein.
Authorized Signatures
For the purpose of binding the parties to the above Inventory
Management Services Agreement, the parties or their the duly authorized
representatives have signed their names below, effective as of the date first
indicated above.
FGI: FGI Print Management
By:/s/ David A. Walters
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David A. Walters, President
MYTURN.COM: MYTURN.COM, INC.
By:/s/ Clark Murray
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Clark Murray
SCHEDULE A
PRICE QUOTATION
*Minimum order quantity: Prices for order under 8 units to be charged at $1.60
per unit. : Prices for order over 8 units to be charged $1.30 per unit.
*All shipments for PC/Keyboards are F.O.B. FGI's dock in the Hanover Park
Illinois.
*FGI to charge Myturn.com all shipping charges, for the PC/Keyboard. In the
event the PC/Keyboard is shipped with the Cannon Printer and/or Monitor, the
shipping charges will be prorated to reflex the shipping cost of the PC/Keyboard
only.
*Normal delivery for these products is 3-5 days to final retail destination.
Shipments will be made with in 48 hours of order receipt if material is in
stock. Special order and expedited shipments are available but may incur a
special handling fee to be mutually agreed to prior to shipment.
*Storage: Storage to be charged by counting inventory on the 15th of the month
and the last day of the month. The quantities will be totaled and divided
by 2 to calculate the average for the month. That carton count will be
invoiced at $ .35 per carton.
*Price to purchase pallets: Pallets to be furnished by Myturn.com and/or the
price to be negotiated with FGI.
*Order processing to include but not limited to:
a. Order Entry f. Reporting
b. EDI Processing g. Returns and R.M.A.'s
c. Labeling h. Trend Forecasting
d. Shipping to Include Freight
e. Invoicing
*FGI to give Myturn.com access to all invoicing, shipping and inventory
information.
*Programming charges: $100.00 per hour.
*RMA charge: $5.00 per RMA plus a unit charge to be negotiated at the time of
the RMA.
SCHEDULE B
RETURNS
This Schedule B attachement to be added at a later date.
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