Exhibit 10.53

 

Datapak Services Corporation

New Hudson ··· Phoenix ··· Reno

 

MASTER SERVICES AGREEMENT

 

                This MASTER SERVICES AGREEMENT (this “Agreement”) is made
effective as of January 1, 2008, by and between Datapak Services Corporation, a
Michigan corporation (“Datapak”), and Bare Escentuals Beauty , Inc. a Delaware
corporation (“Bare Escentuals”).

 

RECITALS

 

                WHEREAS, Datapak provides comprehensive inventory warehousing,
order fulfillment, call center and administrative services; and

 

                WHEREAS, Datapak desires to provide such services to Bare
Escentuals, and Bare Escentuals wishes to purchase such services from Datapak,
upon the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

                NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.             SERVICES.  Datapak shall provide to Bare Escentuals all services
(the “Services”) set forth on the Schedule of Work (“SOW”) attached as Schedule
1 to this Agreement.  The SOW may be amended or modified at any time during the
Term (as defined in Section 4 of this Agreement) upon the mutual agreement of
the parties, which shall be set forth in writing and executed by an authorized
representative of each party.

 

PRICING; PAYMENT.  In consideration of the provision of services set forth on
the SOW and otherwise in this Agreement, Bare Escentuals agrees to make payment
to Datapak in accordance with the “Pricing Schedule” set forth on Schedule 1 to
this Agreement. All payments shall be due within thirty (30) days of receipt by
Bare Escentuals of an invoice from Datapak, except for invoices related solely
to transportation costs, which invoices shall be paid within ten (10) days of
receipt.

 

2.             AUDIT.  Datapak agrees to maintain complete records of each
transaction involving the purchase, sale, or shipping of any Bare Escentuals
merchandise by Datapak for a period of two (2) years following the transaction. 
Upon reasonable notice, Bare Escentuals (or a certified public accountant
appointed by Bare Escentuals in its sole discretion) shall have the right to
audit Datapak’s invoices and business processes to verify that they are in
compliance with the Pricing Schedule.  In the event that such audit indicates
that Datapak has overcharged Bare Escentuals by more than two percent (2%), then
such overpaid amount plus the costs of such audit, shall be immediately paid by
Datapak to Bare Escentuals.

 

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                TERM.  This Agreement shall become effective on January 1, 2008,
and shall continue in effect until terminated by either party on 30 days written
notice to the other.

 

3.             OWNERSHIP OF INVENTORY/CUSTOMER DATA.

 

a.             Bare Escentuals’ Proprietary Rights.  The Bare Escentuals’
merchandise warehoused or otherwise held by Datapak, and any and all customer
data or other Confidential Information (as defined in Section 7 of this
Agreement) obtained or learned by Datapak pursuant to this Agreement involve
valuable patent, copyright, trade secret, trade name, trademark and other
proprietary rights of Bare Escentuals.  No title to or ownership of any such
proprietary right is transferred to Datapak under this Agreement or by use of
any trademark, patent or other proprietary right.  Bare Escentuals reserves all
such proprietary rights.  Datapak will not infringe, misappropriate or violate
any proprietary rights of Bare Escentuals.  Without limiting the generality of
the foregoing, Datapak will not register or attempt to register, directly or
indirectly, any such patents, copyrights, trade names, trademarks or other
proprietary rights other than in the name of Bare Escentuals.  Bare Escentuals
shall own all of the merchandise and other inventory it deposits in Datapak’s
warehouses (collectively, the “Inventory), and all of the customer data.

 

b.             Datapak’s Proprietary Rights.  Datapak is not authorizing,
selling, transferring, licensing or permitting the use of any of its
intellectual property, including but not limited to proprietary data, formulas,
database structures, database format, computer applications, programming and
software owned, licensed or developed by Datapak.  All computer applications,
programming and software, either purchased, owned, licensed or developed by
Datapak in connection with any services rendered by Datapak under this Agreement
shall remain exclusive property of Datapak and the Bare Escentuals shall never
have any right, entitlement or claim to said property, and Bare Escentuals
disclaims all rights, claims, or entitlement to same.

 

4.             CONFIDENTIALITY.  “Confidential Information” means information
that is provided by or on behalf of either party (the “Discloser”) to the other
party (the “Recipient”), or to which a party otherwise gains access, in the
course of or incidental to the performance of this Agreement, is of value to the
Discloser and is not generally known to others, including, without limitation,
customer lists, customer information, employee lists, technology, processes,
marketing techniques, price lists, pricing policies, business methods, contracts
and contractual relations with the Discloser’s customers and suppliers,
know-how, software, future and proposed products and services, financial
information, business forecasts, sales and merchandising, and marketing plans
and information.  Confidential Information may be disclosed in written or other
tangible form (including on magnetic media) or by oral, visual or other means. 
The terms, conditions and provisions of this Agreement shall be deemed by the
parties hereto to be

 

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Confidential Information of both parties hereto.  The Recipient of Confidential
Information shall use the Confidential Information only for the purposes of this
Agreement or as otherwise expressly permitted by this Agreement.  Recipient of
Confidential Information shall protect such Confidential Information from
disclosure to others, using the same degree of care used to protect its own
confidential or proprietary information of like importance, but in any case
using no less than a reasonable degree of care.  Recipient may disclose
Confidential Information received hereunder (a) to its affiliates, (b) to
Recipient’s employees and independent contractors, and (c) to Recipient’s
affiliate’s employees and independent contractors, and who in all of the
foregoing cases have a need to know such information and are bound to protect
the received Confidential Information from unauthorized use and disclosure under
terms no less restrictive than those contained in this Agreement.  Confidential
Information shall not otherwise be disclosed by Recipient to any third party
without the prior written consent of the Discloser.  The restrictions herein on
the use and disclosure of Confidential Information shall not apply to
information that:  (i) was publicly known at the time of Discloser’s
communication thereof to Recipient or becomes publicly known through no fault of
Recipient subsequent to the time of such communication; (ii) was in Recipient’s
possession free of any obligation of confidence at the time of Discloser’s
communication to Recipient; (iii) is developed by Recipient independently of and
without reference to any of Discloser’s Confidential Information or other
information that Discloser disclosed in confidence to any third party; (iv) is
rightfully obtained by Recipient from third parties authorized to make such
disclosure without restriction; (v) is identified in writing by the Discloser as
no longer proprietary or confidential.  In the event Recipient is required by
law, regulation or court order to disclose any of Discloser’s Confidential
Information, Recipient will promptly notify Discloser in writing prior to making
any such disclosure and shall reasonably cooperate in any efforts of Discloser
to seek a protective order or other appropriate remedy from the proper
authority.  If Discloser is not successful in precluding the requested
disclosure, Recipient will furnish only that portion of the Confidential
Information that is legally required and will exercise all reasonable efforts to
obtain reliable assurances that confidential treatment will be accorded the
Confidential Information.  All Confidential Information disclosed under this
Agreement (including information in computer software or held in electronic
storage media) shall be and remain the property of Discloser or its licensors.
All such information in any computer memory or data storage apparatus shall be
erased or destroyed, and all such information in tangible form in the possession
or under the control of the Recipient shall, at the discretion of the Recipient,
either be destroyed or returned to the Discloser promptly upon the earlier of:
(i) the written request of the Discloser or (ii) termination or expiration of
this Agreement, and in any of such events and to the applicable extent shall not
thereafter be retained in any form by or through Recipient unless otherwise
expressly permitted hereunder.

 

5.             INSURANCE/RISK OF LOSS.

 

a.             Insurance.  Datapak shall maintain in full force and effect
policies of insurance for the full replacement cost of all Bare Escentuals’
merchandise located in Datapak’s warehouses. Datapak shall likewise maintain in
full force and effect policies of insurance on buildings and equipment at
Datapak’s facilities, including commercial general liability insurance, property
damage and personal injury insurance and fire and theft coverage with limits (in
combination with excess liability insurance) of Two Million Dollars ($2,000,000)
per occurrence combined single limit and Four Million Dollars ($4,000,000) in
the aggregate, and shall maintain

 

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workers’ compensation coverage as required by applicable law.  Such policies of
insurance shall be issued by a responsible insurer satisfactory to Bare
Escentuals, shall include Bare Escentuals as an additional insured, shall
provide Bare Escentuals not less than thirty (30) days advance notice of
cancellation or material change in the policy, and shall not include a policy
deductible in excess of $10,000.  Upon Bare Escentuals’ request, Datapak shall
provide (i) a copy of the insurance policies required to be carried under this
Section 8.a of this Agreement, and (ii) a certificate of insurance from the
insurer certifying that such coverage is in place.

 

b.             Risk of Loss.  Bare Escentuals shall be fully responsible for the
Inventory until it is physically received at Datapak’s warehouses.  Datapak
shall be responsible for the Inventory once delivered to its warehouses until
such time as such Inventory is delivered by Datapak and accepted by a shipping
company pursuant to an order for shipment.  Thereafter, Bare Escentuals shall
bear the risk of loss unless and until such Inventory is returned to the custody
of Datapak.

 

6.             INDEMNIFICATION.

 

a.             Datapak Indemnity.  Datapak shall defend, indemnify and hold Bare
Escentuals harmless against all claims, losses, damages, costs, and expenses,
including reasonable attorneys’ fees, arising out of or related to (i) Datapak’s
breach or default under this Agreement; (ii) any personal injury, death or
property damage, sustained by any person arising out of or resulting from
Datapak’s activities contemplated by this Agreement, (iii) the negligence or
misconduct of Datapak, or its employees, agents or contractors in the provision
of call center services.

 

b.             Bare Escentuals Indemnity.  Bare Escentuals shall defend,
indemnify and hold Datapak harmless against all claims, losses, damages, costs,
and expenses, including reasonable attorneys’ fees, arising out of or related to
Bare Escentuals’ products, provided that (i) Datapak notifies Bare Escentuals in
writing within thirty (30) days of Datapak’s receipt of notice of the claim,
(ii) Bare Escentuals has sole control of the defense and all related settlement
negotiations, and (iii) Datapak provides Bare Escentuals with the assistance,
information and authority necessary to perform the above.

 

7.             DATAPAK’S REPRESENTATIONS AND WARRANTIES.  Datapak represents and
warrants to Bare Escentuals that (i) it has the full capacity and authority and
all necessary licenses, permits and consents to enter into and to provide the
services under this Agreement and any other documents to be entered into by it
hereunder, (ii) all statements and representations in this Agreement are true
and accurate, (iii) it will perform its obligations under this Agreement in good
faith, (iv) its employees, agents and or contractors are appropriately qualified
to perform their duties and responsibilities contemplated herein and will
perform their obligations with all due skill, care and diligence, including
without limitation all call center related activities, and (v) it will perform
its obligations under this Agreement in compliance with all applicable laws and
regulations now in effect or hereinafter promulgated or enacted.

 

8.             LIMITATION OF LIABILITY.  NEITHER PARTY WILL BE HELD LIABLE FOR
ANY INDIRECT, SPECULATIVE, CONSEQUENTIAL, INCIDENTAL, AND/OR SPECIAL DAMAGES
INCLUDING, BUT NOT LIMITED TO, LOSS OF USE, BUSINESS INTERRUPTIONS, AND LOSS OF
PROFITS, REGARDLESS OF WHETHER SUCH PARTY HAS ADVANCE NOTICE OF THE POSSIBILITY
OF SUCH DAMAGES.

 

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9.             NOTICES.  All notices and other communications required or
permitted hereunder will be in writing and will be mailed, hand delivered, sent
by Federal Express or other recognized overnight courier service, or sent by
facsimile transmission, to the parties as follows:

 

If to Datapak:

 

Datapak Services Corporation

55353 Lyon Industrial Drive

New Hudson, Michigan 48165

Attention:Larry W. Kinney, President

Telephone: (517) 552-1400

Facsimile: (517) 552-0400

Email: lkinney@datapakservices.com

 

With copy to:

 

Datapak Services Corporation

55353 Lyon Industrial Drive

New Hudson, Michigan 48165

Attention:Robert G. Lahiff, General Counsel

Telephone: (517) 552-1400

Facsimile: (517) 552-0400

Email: rlahiff@datapakservices.com

 

 

 

 

If to Bare Escentuals:

 

Bare Escentuals, Inc.

71 Stevenson Street, 16th Floor

San Francisco, California 94105

Attention: Myles McCormick, EVP, CFO and COO

Telephone: (415) 489-5558

Facsimile: (415) 489-5999

Email: mmcormick@bareescentuals.com

 

With a copy to:

 

Bare Escentuals, Inc.

71 Stevenson Street, 22nd Floor

San Francisco, California 94105

Attention: Deanna Chechile, VP and General Counsel

Telephone: (415) 489-5260

Facsimile: (415) 520-9795

Email: dchechile@bareescentuals.com

 

 

Any party may from time to time, by written notice to the others, designate a
different address or additional persons that will be substituted for and/or
added to the address(es) above specified.  Notices by mail will be sent by
United States certified or registered mail, return receipt requested, postage
prepaid, and will be deemed given and effective upon receipt or refusal of
receipt.  Notices by hand delivery will be deemed given and effective upon the
delivery thereof.  Notices by overnight courier will be deemed given and
effective on the first business day following the delivery thereof to Federal
Express or another recognized overnight courier service.  Notices by electronic
mail or facsimile will be deemed given upon transmission (provided, in the case
of facsimile transmission, a send confirmation is received and retained by the
sending party).

 

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10.          MISCELLANEOUS.

 

a.             Assignment.  Datapak will not assign this Agreement, in whole or
in part, directly, by operation of law, or otherwise, except with the prior
written consent of Bare Escentuals.

 

b.             Attorneys’ Fees.  If any action will be instituted between
Datapak and Bare Escentuals in connection with this Agreement or in connection
with the enforcement of any indemnity under this Agreement (including appeals),
the party prevailing in such action will be entitled to recover from the other
party all of its costs of action, including actual consultants’ and attorneys’
fees and attorneys’ costs.  For purposes of this Agreement, the terms
“attorneys’ fees” and “attorneys’ costs” will include the fees and expenses of
counsel to the prevailing party, which may include printing, photocopying,
duplicating and other expenses, air freight charges and fees billed for law
clerks, paralegals and other persons not admitted to the bar but performing
services under the supervision of an attorney.

 

c.             Construction.  This Agreement will not be construed more strictly
against any party merely by virtue of the fact that the same has been prepared
by such party or its counsel, it being recognized both of the parties hereto
have contributed substantially and materially to the preparation of this
Agreement.  All words in this Agreement that are expressed in the neuter gender
will be deemed to include the masculine, feminine and neuter genders and any
word in this Agreement that is expressed in the singular or plural will be
deemed, whenever appropriate in the context, to include the plural and the
singular.

 

d.             Counterparts.  This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which when
taken together will constitute one and the same instrument.  The signature
page of any counterpart may be detached therefrom without impairing the legal
effect of the signature(s) thereon provided such signature page is attached to
any other counterpart identical thereto except having additional signature
pages executed by the other party or parties to this Agreement attached thereto.

 

e.             Governing Law/Venue.  This Agreement will be governed in all
respects by the laws of the State of California.  The United Nations Convention
on Contracts for the International Sale of Goods shall have no application
whatsoever to this Agreement.  The parties submit to the personal jurisdiction
of the Courts (Federal and State) in the State of California, with respect to
all matters related to or arising out of this Agreement, including post judgment
proceedings.  The parties agree that the venue for all disputes, claims or
litigation arising out of or related to this contract shall be exclusively in
the State or Federal Courts in the City and County of San Francisco, California.

 

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f.              Headings.  Headings of Sections are for convenience of reference
only, and will not be construed as a part of this Agreement.

 

g.             No Third Party Beneficiary.  This Agreement is solely for the
benefit of the parties hereto and, to the extent provided in this Agreement,
their respective partners, directors, officers, employees, agents and
representatives, and no provision of this Agreement will be deemed to confer
upon other third parties any remedy, claim, liability, reimbursement, cause of
action or other right.

 

h.             Partial Invalidity.  In the event that any provision of this
Agreement will be unenforceable in whole or in part, such provision will be
limited to the extent necessary to render the same valid, or will be excised
from this Agreement, as circumstances require, and this Agreement will be
construed as if said provision had been incorporated in this Agreement as so
limited, or as if said provision has not been included in this Agreement, as the
case may be.

 

i.              Waiver.  No waiver of any provision or condition of this
Agreement by any party will be valid unless in writing signed by such party.  No
such waiver will be taken as a waiver of any other or similar provision or of
any future event, act, or default.

 

j.              Relationship of the Parties.  Datapak is an independent
contractor and not an agent, employee, franchisee or partner of Bare Escentuals,
and is acting in the ordinary course of business.  Datapak has no authority to
create or assume any obligation, express or implied, on behalf of Bare
Escentuals.  This Agreement does not create or evidence any joint venture or
partnership of the parties.

 

k.            Entire Agreement.  This Agreement, including all schedules and
exhibits attached hereto and documents to be delivered pursuant hereto, will
constitute the entire agreement and understanding of the parties from the
effective date of this agreement (January 1, 2008) going forward, but only for
the purposes of this Agreement.  The parties have entered into prior
agreements.  The most recent prior agreement between the parties had an
effective date of January 3, 2006, with an expiration date of December 31, 2007,
along with continuing obligations after the December 31, 2007 expiration date. 
This Agreement does not in any way affect the terms, conditions, validity or
enforceability of any prior agreement nor affect the continuing obligations
under any prior agreements between the parties. Each agreement shall be applied
and enforced separately between the parties.   This Agreement may be amended
only by a written amendment executed by both of the parties hereto.

 

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IN WITNESS WHEREOF, the parties have executed this Order Fulfillment and
Administrative Services Agreement as of the date first set forth above:

 

DATAPAK SERVICES CORPORATION,

 

BARE ESCENTUALS BEAUTY, INC.,

A Michigan corporation:

 

A Delaware corporation:

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

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SCHEDULE 1

 

Statement of Work

 

WAREHOUSING AND ORDER FULFILLMENT SERVICES

 

Datapak shall provide to Bare Escentuals a customized order fulfillment and
administrative program in connection with the sale of Bare Escentuals’ products.
This shall include the following:

 

(a)                                  Establishing customized programs and
services to meet Bare Escentuals’ storage and order fulfillment needs related to
the Bare Escentuals’ spa/professional markets and international distributor
sales and infomercial business;

 

(b)                                 Processing orders daily via electronic
transfer, email, fax and telephone; the orders will include among other things,
the name of the customer, the shipping address, the goods to be shipped, the
freight carrier to be used for shipping and any special packing instructions
(the “Shipping Order”).

 

(c)                                  Arranging for the shipment of the ordered
merchandise on behalf of the Bare Escentuals to customers, with Bare Escentuals
customer invoices included for orders taken on account, and providing avenues
for invoice payment and collections with an Aged Accounts Receivable (AAR)
Report;

 

(d)                                 Providing adequate warehouse space for Bare
Escentuals’ inventory, including appropriate temperature and humidity controls
so as to avoid damage or mutation of the Inventory. Bare Escentuals shall
(i) specifically identify each such SKU that requires particular temperature and
humidity controls, and (ii) specify the specific temperature and humidity
controls for each such SKU, and the parties will reach mutually agreeable price
additions or modifications required for Datapak to implement such additional
controls, which additions or modifications shall be reflected in a written
amendment to the Pricing Schedule signed by both parties.

 

(e)                                  Providing to Bare Escentuals on a daily
basis via electronic transfer, email, fax and telephone, tracking information
and confirmation of shipping of all packages sent on behalf of Bare Escentuals.

 

(f)                                    Offering to Bare Escentuals full access
to its program at Datapak through electronic data transfers, email or report
facsimile.

 

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(g)                                 Providing to Bare Escentuals on a monthly
basis a complete detailed report on all project activity. This monthly report
shall include:

 

(i)                         Inventory value status;

 

(ii)                      Aging accounts receivable status:

 

(iii)                   Item sales analysis:

 

(iv)                  Bank transaction report reconciliation:

 

(v)                     Sales tax information.

 

(vi)                  Other reports periodically requested by Bare Escentuals.

 

CALL CENTER SERVICES

 

I.              Datapak will provide Bare Escentuals with inbound customer
contact services as follows:

 

(a)                                  Answer all inquiries received from Bare
Escentuals customers via multiple communication methods (e.g., telephone, email,
fax, voice message, web chat, etc.), including:

 

(i)            taking orders;

 

(ii)           checking the status of orders;

 

(iii)          processing credits;

 

(iv)          changing or canceling continuity shipment membership;

 

(v)           updating customer profile information;

 

(vi)                              addressing customers’ issues with their online
accounts at bareminerals.com (or other web sites);

 

(vii)         providing product information;

 

(viii)        answering general questions about the company and its retail
outlets;

 

(ix)                                or providing any other customer service
related to Bare Escentuals’ products;

 

(x)                                   provide friendly, courteous customer
service in accordance with Bare Escentuals’ customer service philosophy

 

II.            Datapak will provide Bare Escentuals with outbound customer
contact services as follows:

 

(a)                                  Contact Bare Escentuals’ customers in order
to rectify order issues such as incorrect address or declined credit card, etc.;
and

 

(b)                                 Initiate outbound telephone and/or email
campaigns as directed by Bare Escentuals.

 

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SCHEDULE 1

 

Pricing Schedule

 

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