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Exhibit (b)
PERFUMANIA.COM, INC.
E-COMMERCE SERVICES AGREEMENT
This Agreement ("Agreement") is made and entered into as of this first
(1st) day of October, 2000 ("Effective Date"), by and between TaketoAuction.com,
Inc. ("TTA"), a Florida corporation, with its principal offices located at 5555
Anglers Avenue, Suite 16, Ft. Lauderdale, FL 33312, and Perfumania.com, Inc.
("Perfumania") a Florida corporation, with its principal office located at 11701
NW 101 Road, Miami, Florida 33178.
Perfumania provides global electronic commerce, logistics and fulfillment
services ("Services") that companies can utilize to transact business on the
Internet and sell products directly to Internet users. TTA maintains an Internet
website ("Website") which is accessible by Internet users, and desires to
utilize such Services in order to sell certain products ("Products") to Internet
users. Perfumania and TTA desire to enter into this agreement whereby TTA
markets the Products available for purchase through the Website, and TTA has
retained Perfumania to provide the following Services related to the sale of
Products by TTA: warehousing, packaging, transportation management, and returned
Products handling.
1. PRODUCTS TO BE MARKETED
TTA is responsible for delivering all Products to the location
identified in Schedule 1 (the "Warehouse"), and also maintaining
adequate quantities of all Products to fulfill customer orders placed
through the Website. Perfumania will only fulfill customer orders from
TTA for Products that are made available for shipment from the
Warehouse by TTA. TTA may at any time, with five (5) business days
written or electronic notice, add or remove Products from the Website,
which will amend this Agreement accordingly. All Products remain the
property of TTA at all times, and Perfumania will have no property
rights therein.
Perfumania will only accept general merchandise in accordance with this
agreement. In no event will Perfumania be responsible for irreplaceable
collectible items or items with individual values greater than five
thousand dollars ($5,000).
2. SERVICES TO BE PROVIDED
Perfumania shall provide Services to TTA as described in Schedule 1.
Perfumania shall use all commercially reasonable efforts to maintain
the availability of its Services to enable TTA to market its Products,
provided however, that Perfumania makes no representations or
warranties that such Services will be available on a continual and
uninterrupted basis during the term of this Agreement. In the event
that Services are interrupted, TTA shall have remedy as described in
Section 8, Term and Termination.
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Perfumania acknowledges that TTA is engaged in the business of selling
the Products and that nothing in this Agreement shall limit or restrict
that right or ability. TTA acknowledges that Perfumania is engaged in
the business of providing Internet electronic commerce Services, and
that nothing in this Agreement shall limit or restrict the right or
ability of Perfumania to provide such Services to companies that
compete, either directly or indirectly, with TTA or its Products.
3. BUSINESS RELATIONSHIP
Perfumania shall have no authority to commit TTA in any matter,
including any representation or warranty regarding the Products,
without TTA's prior written consent. Perfumania will not use TTA's name
in any way not specifically authorized by this Agreement. Perfumania
agrees to maintain the quality and integrity of the TTA trademark at
all times.
TTA shall exercise no control over the activities and operations of
Perfumania, nor have any authority to commit Perfumania in any matter,
or use Perfumania's name in any way without the prior written consent
of Perfumania. TTA may make reference to, or use the Perfumania name,
any related trademarks or trade names, in any advertising or promotion
related to this Agreement with Perfumania's prior written consent. TTA
agrees to maintain the quality and integrity of the Perfumania
trademark at all times. Under no circumstances shall Perfumania or its
employees be considered agents or employees of TTA, nor shall TTA or
Perfumania be considered joint venturers or partners.
4. FEES AND PAYMENT
Perfumania will bill for all services monthly, as set forth in Schedule
2, and payment will be due from TTA net thirty (30) days from the date
of Perfumania's invoice date. Payment of invoice does not constitute
final acceptance by Perfumania and is subject to adjustment for errors
and shortages. The parties agree to review the maximum number and
magnitude of price increases allowable per year. Perfumania may,
subject to the terms of such review, increase or decrease the Fees at
its sole discretion by providing TTA with at least ninety- (90)
business days prior written notice of any such change. On the effective
date of such notice, this Agreement will be considered to be amended
accordingly
5. INSURANCE
TTA shall maintain product liability insurance no less than $2 million
with an "A" rated carrier that names Perfumania as an additional
insured in amounts and coverage as is reasonably acceptable to
Perfumania. Upon request, TTA shall provide Perfumania with evidence,
satisfactory to Perfumania that such insurance has been secured. TTA
will also maintain general liability and property damage insurance on
Products consistent with prudent and customary business practices.
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6. INDEMNIFICATION
TTA agrees to defend, indemnify and hold harmless Perfumania, its
stockholders, officers, directors, employees, or agents from and
against any and all claims, losses, liabilities and expenses (including
attorneys' fees) related to or arising out of any Product sold by TTA
on the Website, or Services provided or performed by Perfumania under
this Agreement or, including, without limitation, claims made by third
parties (including customers of TTA) related to any false advertising
claims, liability claims for Products sold by TTA or arising out of the
storage of the Products, claims for patent, copyright or trademark
infringement, or for claims by any tax authority related to the sale of
the Products.
7. LIMITATION OF LIABILITY
In no event shall Perfumania, its stockholders, officers, directors,
employees, or agents be liable to TTA or any of its affiliates or
employees or to any third party, including, but not limited to,
end-users of the Products, for any loss of profit or revenue, or for
any indirect, consequential, incidental, punitive or similar or
additional damages, whether incurred or suffered as a result of (a) any
failure of Products, or any direct or indirect consequences thereof; or
(b) unavailability of Services, performance, non-performance,
termination, breach, or other action or inaction under this Agreement,
or for any other reason, even if TTA advises Perfumania of the
possibility of such loss or damage.
Perfumania agrees to use due care in protecting the Products while such
Products are in the Warehouse. Perfumania will not be liable for loss
or damage to any Products unless caused by Perfumanias' negligence, in
which case liability will be limited to a maximum of twenty five
thousand dollars ($25,000) per occurrence, with a maximum of fifty
thousand dollars ($50,000) in any 12-month period. In the event loss or
damage exceeds fifty thousand dollars ($50,000) in any 6-month period,
TTA may terminate the Agreement for such cause. TTA waives all right of
subrogation on behalf of its insurers for damages above these amounts,
no matter how caused.
In addition to the maximum liability per occurrence, TTA agrees to an
aggregate amount of loss and damage exclusion and a damage and
shrinkage allowance of 0.5 of one percent per year based on the amount
of throughput of individual Products. In the event that damage and
shrinkage exceeds 1.0 percent per year, TTA may terminate the Agreement
for such cause. The damage and shrinkage allowance shall apply to loss
or damage to Products (including mysterious disappearance) caused by
Perfumania's negligence, excluding any loss or damage to Products
caused by defects in the packaging of such Products, attributable to
TTA's carriers (contract or otherwise) failing to deliver the full
shipment of expected Products to the Warehouse or otherwise caused by
the acts or omissions of such carriers. In the event of loss, damage,
or shrinkage above the aggregate amount set forth above, Perfumania's
liability for any such loss, damage or shrinkage shall be limited to
(i) TTA's actual cost of such affected Product (s), less salvage or
(ii) the monthly Warehousing Fee as
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determined in accordance with Schedule 2, whichever is less. TTA shall
be solely responsible for any concealed shortage and damage and in no
event shall Perfumania be liable or responsible for any such shortage
or damage.
8. TERM AND TERMINATION
This Agreement begins upon the signing of this Agreement by both
parties and shall continue in effect for six-months. This Agreement
will automatically renew for successive one-year terms provided both
parties are in agreement and satisfied with the terms and conditions of
this initial Agreement. Either party may terminate this Agreement upon
notice prior to automatic renewal. This Agreement may be terminated by
either party at any time by giving ninety (90) days written notice. In
the event of termination, Perfumania will work with TTA to facilitate
an orderly transfer. Perfumania will ship all Products held in storage,
complete and ship all work in progress, and bill TTA for the completed
work in progress and for any freight charges incurred.
During the initial term of this Agreement and upon full commercial
operability of TTA's website, TTA may terminate the Agreement in the
event that Services are interrupted for a duration of five (5) days, or
ten (10) cumulative days.
This Agreement may be terminated immediately, without notice by either
party, if the other party (a) institutes any voluntary proceeding for
relief under the Bankruptcy Code; (b) consents to the entry of an order
against it for relief in an involuntary case against it or such
involuntary case remains undismissed or unfounded for a period of 30
days, (c) makes a general assignment for the benefit of creditors, (d)
becomes insolvent, (e) has a receiver appointed with respect to its
assets by a court of competent authority, or (f) if the other party
breaches any covenant, term or condition of this Agreement and fails to
cure such breach within twenty-one (21) days of receipt of written
notice of such breach from the terminating party.
Sections 6, 7, 9 and 10 shall survive termination of the Agreement.
9. TAXES
TTA agrees to calculate, collect, and remit any and all sales and use
taxes required to be collected on sales of Products through its
Website. TTA agrees to pay and indemnify and hold harmless Perfumania
from and against all sales, use, personal property, gross receipts,
excise, franchise, and business taxes, together with any penalties,
fines or interest thereon, imposed by any foreign, federal, state or
local government or taxing authority, with respect to the storage,
shipment and sale of the Products. TTA bears full responsibility for
the accuracy and applicability of such tax information, and will be
solely responsible for paying all such sales tax to the applicable
taxing authorities.
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10. CONFIDENTIALITY
TTA and Perfumania agree that all information including, without
limitation, the terms of this Agreement, business and financial
information, customer and vendor lists and pricing and sales
information, concerning TTA or Perfumania, respectively, or any of its
affiliates, shall remain strictly confidential and secret and shall not
be utilized, directly or indirectly, by such party for its own business
purposes or for any other purpose except and solely to the extent that
any such information is generally known or available to the public.
Notwithstanding, each party is authorized to disclose any such
information (a) to its accountants, attorneys or other agents on a
confidential basis, (b) to any person pursuant to a subpoena issued by
any court or administrative agency, and (c) otherwise as required by
applicable law, rule, regulation or legal process. In the event that
disclosure is required under (b) or (c), disclosing party will
immediately notify the other party of both the request for disclosure,
and the information disclosed by the disclosing party.
11. ARBITRATION
In the event of any dispute with respect to this Agreement, the parties
will attempt to settle all disputes, controversies or claims, whether
based on contract, tort, statute, fraud, misrepresentation or any other
legal theory, through good faith negotiations. If those attempts fail
to resolve the dispute within forty-five (45) days of the date of
initial demand for negotiations, such dispute shall be determined by
binding arbitration before the American Arbitration Association in
Broward County of Florida State, in accordance with commercial
arbitration rules of that association. The fees and the expenses
incident to the arbitration proceedings shall be borne equally by the
parties. The respective party engaging such counsel or calling such
witnesses shall pay the fees and expenses of counsel for the respective
parties and of witnesses.
12. FORCE MAJEURE
Either party is excused from performing its obligations under this
agreement only to the extent that it is precluded from doing so by
authority of laws, acts of God, strikes, lockouts, causalities, or
other causes beyond its control. The affected party will promptly give
written notice to the other party of the nature consequence of the
cause, the expected duration and date of remedy, and will not be liable
to the other party for breach of this Agreement. These provisions do
not apply to monetary amounts owed by either party to the other.
13. MISCELLANEOUS
This Agreement shall be binding upon Perfumania and TTA, and their
respective successors and assigns. This Agreement constitutes the
entire agreement of the parties, and can only be amended or modified in
writing by both parties. Perfumania may assign its rights and
responsibilities in this Agreement, provided that Perfumania will
notify TTA in writing forty-five (45) days prior to any such
assignment, during which time TTA may terminate the Agreement, unless
the assignment is between
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affiliated companies. The failure by either party to exercise any right
or privilege in this agreement or to insist upon strict adherence to,
or to object to the breach by the other party of, any term, provision
or condition of this Agreement shall not constitute a waiver thereof
and shall not preclude such party from thereafter exercising that or
any other right or privilege, or from thereafter insisting upon strict
adherence to that term or any other term or objecting to that or any
prior or subsequent breach of the same or any other nature. Any notice
required to be given shall be in writing and to the addresses set forth
below. All notices shall be deemed given when received. Perfumania and
TTA may each change, from time to time, their address, phone and fax
numbers by written notice, each to the other as provided herein.
If to TakeToAuction, Inc.: If to Perfumania:
5555 Anglers Avenue, Suite 16 11701 NW 101st Road
Ft. Lauderdale, FL 33312 Miami, Florida 33178
Attn: Albert Friedman Attn: Jeffrey Geller
Telephone: (954) 987-0654 (305) 889-1600
Fax:(954) 987-5540 (305) 888-9388
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
TaketoAuction.com, Inc. Perfumania
By: /s/ Albert Friedman By: /s/ Jeffrey Geller
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Name: Albert Friedman Name: Jeffrey Geller
Title: President and CEO Title: President
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SCHEDULE 1
SERVICES
1. INCOMING SHIPPING
Perfumania will manage income shipping to the Perfumania designated
warehouse located at 11701 NW 101 Road, Miami, FL 33178, and/or such other
place or places designated by Perfumania. TTA will bear all costs of
shipping TTA's products from its location at 5555 Anglers Avenue, Suite 16,
Ft. Lauderdale, Florida 33312 to Perfumania's warehouse.
2. PRODUCT RECEIPT AND WAREHOUSING
TTA shall deliver the Products to the Perfumania designated Warehouse. All
incoming Products delivered to the Perfumania designated Warehouse shall
contain a packing slip.
Upon receipt of the Products at the Perfumania designated Warehouse,
Perfumania shall perform the following tasks including, but not limited to,
unloading, quantity count and verification, exterior package damage check
and assessment, inventory receipt processing, transmission of receipt
transaction to TTA, putaways in accordance with first-in/first-out
methodologies, and updating statistics on the Products in TTA's Warehouse
management system.
3. ORDER PROCESSING
Perfumania will accept and process daily written, telephonic or electronic
notice orders for Products as indicated by TTA. All orders received by
2:00PM will be processed that same day. No Services will be provided by
Perfumania on Saturdays, Sundays or holidays observed by Perfumania.
4. INVENTORY MANAGEMENT
Perfumania will provide TTA with Products inventory information and
shipment status/tracking data by secure, password-controlled access to the
Perfumania information system, or on a daily basis via the Internet or
other mutually agreeable method.
Inventory will be cycle counted daily. A complete physical inventory will
be taken on December 31 each year or such other time as mutually agreed
upon by both parties to this Agreement.
5. SYSTEM
Perfumania shall provide TTA with the systems and programming
specifications necessary to enable TTA to utilize Perfumania Services. The
Internet and/or EDI will be the primary communication method for providing
inventory and order information.
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Perfumania will also provide, if requested by TTA, customized interfaces
with TTA's financial and/or operational systems at an additional cost.
TTA will provide the following equipment for the fulfillment of Services as
provided for in this Agreement:
2 COMPUTERS DELL GX 110
2 MONITORS DELL 770P
1 SCANNER SYMBOL
1 SCANNER MCTROLOGIC
LABEL MACHINE DATAMAX I CLASS DMX-I 4206
6. TRANSPORTATION
TTA is responsible for all costs related to the transportation, shipping,
and delivery of Products to the Warehouse. Perfumania will provide
transportation and shipping of Products from the Warehouse to TTA's
customers, and will ship each order according to the required delivery
carrier and service level indicated by TTA.
7. PACKAGING
Perfumania agrees to package all Products in standard packaging provided by
the delivery carrier selected by TTA. Certain products, notified in advance
by TTA, will require bubble wrapping in addition to the standard packaging.
If an item is to be shipped in its standard box, TTA requires Perfumania to
paper wrap the box with a paper approved by TTA.
8. REPORTING
Perfumania will provide TTA with secure, password-protected access to
information contained in the Perfumania system concerning TTA's Products
and orders, including:
(i) by item, the number of Products sold and the applicable selling price;
(ii) by item, the number of Products returned;
(iii) shipping and transportation data;
(iv) warehouse inventory data to include actual time Products spend in
warehouse.
(v) by SKU, complete costs of fulfillment
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SCHEDULE 2
FEES AND CHARGES
1. FULFILLMENT FEES
TTA shall pay Perfumania twelve thousand dollars ($12,000) upon the
execution of this Agreement. This payment will be amortized straight-line
against the Fulfillment Fees, defined below, over the initial six (6)
months of the Agreement. If the Agreement is terminated, for whatever
cause, prior to the initial six (6) months the remaining balance of this
amount will belong to Perfumania.
TTA shall pay Fulfillment Fees based upon the following:
A - Actual Shipping costs plus 25%
B - Packaging fee - Fee will be based on a monthly average of daily
packages shipped and will adjust as volume increases as follows:
1 - up to 250 packages/day - $0.75 per package
2 - up to 500 packages/day - $0.50 per package
3 - up to 800 packages/day - $0.40 per package
4 - up to 1,000 packages/day - $0.30 per package
5 - up to 1,200 packages/day - $0.20 per package
6 - up to 1,400 packages/day - $0.10 per package
7 - over 1,400 packages/day - $0.00 per package
C - Monthly minimum fee - A monthly minimum fee will apply if the charges
in A and B above do not exceed the monthly minimum as follows:
1 - up to 250 packages - $11,000 plus packaging fee (item B)
2 - up to 500 packages - $12,500 plus packaging fee (item B)
3 - up to 800 packages - $15,000 plus packaging fee (item B)
4 - up to 1,000 packages - $17,500 plus packaging fee (item B)
5 - over 1,000 packages - $20,000 plus packaging fee (item B)
Pricing is based on shared warehouse space with Perfumania. The initial
square footage of space allocated to TTA is approximately 5,500 square
feet. If TTA would require any additional space allocation, Perfumania will
charge TTA a square footage rate of $7 per square foot, plus 5% to cover
overhead. The space will be assigned in 1,000 square foot increments and
the area designated for expansion must be approved by both Perfumania and
TTA.
When available, Perfumania will package Products in standard packaging
supplied by delivery carriers selected by TTA. Delivery carriers when
utilizing their premium services often provide cartons. Perfumania can also
provide custom packaging and paper wrapping, as mutually agreed by both
parties.
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2. TRANSPORTATION AND SHIPPING FEES
Shipping charges will be passed through to TTA based on the most
competitive rates available to Perfumania. Shipping includes delivery to
residential or commercial addresses based on type of service, weight of
package, and delivery zone of destination.
3. SETTLEMENT
All fees will be payable in accordance with Item 4. of the Agreement.
Unpaid fees will be subject to a late payment charge, the rate of which
will be the lower of either one percent per month, or the highest rate
allowed by applicable law on the amount outstanding and unpaid from time to
time. The late payment charge shall be calculated from the date that the
unpaid Fees become due and shall be compounded monthly for the period
during which any such Fees remain unpaid.
Perfumania shall maintain complete and accurate records of Products and
shall provide TTA with monthly access to such records at Perfumania's place
of business during normal business hours upon two (2) weeks advance written
notice.
4. INITIAL SHIPPING FEE
TTA will bear all costs of shipping TTA's products from its current
location to Perfumania's warehouse.
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