Unassociated Document


      

    
      Letter
        of Agreement

      June
        29,
        2007

      


      Services:
        Advantage
        Media Services, Inc. (AMS) will perform warehousing, assembly, packaging
        and/or
        fulfillment services (Services) on behalf of Ironclad Performance Wear
        Corporation, a California corporation (Ironclad). AMS shall make its best
        and
        commercially reasonable efforts to perform these Services in a manner consistent
        with custom and practice in the fulfillment industry, and to the satisfaction
        of
        Ironclad.

      


      Term:
        Both
        AMS
        and Ironclad enter into this agreement with the anticipation of an ongoing
        and
        mutually beneficial business relationship Notwithstanding the above, either
        party may terminate this agreement, with or without cause, upon sixty (60)
        days
        written notice to the other party.

      


      Fees
        and Payment Terms: Pricing
        for Services is outlined in EXHIBIT “A”. Payment terms for Services are 30 days
        from the date of invoice, postage/freight prepaid, materials due upon receipt,
        and AMS reserves the right to suspend Services if payment is not received
        within
        this timeframe. If Ironclad, in good faith, disputes any amount billed, the
        undisputed amounts will be paid by the invoice due date and the reasons for
        the
        disputed amounts shall be reported to AMS, in writing, prior to the due date
        of
        the invoice. Both parties agree to work diligently to resolve the dispute
        within
        15 days after receipt of such written notice by AMS. AMS will continue to
        provide undisputed services during the 15 day period, providing all undisputed
        amounts have been paid by the due date. Failure to resolve such dispute during
        the 15-day period shall allow AMS to suspend services, or if both parties
        agree,
        provide services on a pre-paid basis, until the dispute has been resolved.
        AMS
        has the absolute right to suspend all services if payment is not made within
        these terms, or if the total amount of undisputed outstanding fees owed to
        AMS
        reaches or exceeds the wholesale value of the inventory of the products in
        AMS
        possession. AMS and Ironclad will make their best efforts to transact business
        in a manner and cost structure that meets the basic needs of both parties,
        and
        as such either party may request to adjust Fees and Payment Terms from time
        to
        time throughout the Term. Any future Fee and Payment Term adjustments, or
        any
        additional services that are required/requested by Ironclad but not included
        in
        EXHIBIT “A”, will be noted as updates to EXHIBIT “A”, and must be agreed to in
        writing by both AMS and Ironclad in order to be deemed active and approved.
        This
        agreement and pricing must be accepted within 30 days from the proposal date
        by
        signature of Ironclad on the last page of the agreement.  In the absence of
        written acceptance, the act of tendering goods described herein for storage
        or
        other services by AMS within 30 days from the proposal date shall constitute
        such acceptance by Ironclad. 

      


      Inventory:
        AMS will store Ironclad inventory at its facilities, and in doing so will
        serve
        as a separate warehouse location for Ironclad.  All deliveries must be
        prepaid, AMS does not accept COD deliveries. Title to and risk of loss for
        all
        Ironclad inventory stored at AMS will remain with Ironclad, and upon termination
        of this agreement, all inventory will be returned to Ironclad not later than
        five (5) business days following Ironclad’s written request thereof, provided,
        however, that AMS shall be permitted to retain an amount of inventory, if
        any,
        that has a value equal to the then outstanding amounts deemed proper, due
        and
        owing to AMS by Ironclad, provided, further, however, that AMS shall only
        be
        permitted to retain such inventory until such time that Ironclad pays any
        and
        all such amounts, if any, after which time all such inventory shall be returned
        to Ironclad no later than five (5) business days following Ironclad’s written
        request thereof.  Notwithstanding the specific receiving rules as
        established during the CTP, AMS will utilize Ironclad supplied paperwork
        with
        each incoming delivery to receive inventory data into its systems and verify
        counts manually via carton count, including spot check of carton contents
        as
        deemed necessary by AMS to ensure accuracy, at rates defined in Exhibit “A”.
        Ironclad will supply purchase order paperwork in advance of receipt at AMS
        and
        any discrepancies will be noted and reported to Ironclad immediately once
        uncovered. If discrepancies are uncovered during the receiving process, AMS
        will
        escalate manual count verification to 100% of the items in question. In any
        given calendar year, or such shorter period as is determined by Ironclad
        in its
        sole discretion, AMS will be allowed an inventory shrinkage level of no more
        than one percent (1%) of the total value of Ironclad inventory stored at
        and
        shipped from AMS facilities, determined based on the total number of units
        shipped through the AMS facility during the time period under review plus
        the
        total ending inventory at the time of the physical inventory. For the avoidance
        of doubt, inventory shrinkage at any applicable date will equal the difference
        between (i) the audited physical inventory, to be performed by AMS and audited
        by Ironclad (or its assigned auditing agency) on the applicable date, less
        (ii)
        the perpetual inventory recorded on Ironclad’s books and records within AMS’
operating system, plus any and all inventory adjustments (write-offs, net
        cycle
        count adjustments, etc.) during the time period in question (typically twelve
        (12) months. If the initial results of the physical inventory indicate that
        the
        shrinkage level exceeds the maximum level permitted, AMS will be allowed
        up to
        fifteen (15) days to perform research on the inventory which is intended
        to
        explain why some or all of the shrinkage had occurred (hereinafter referred
        to
        as “Discrepancy Research”, and present the results of these findings, if any, to
        Ironclad. In the event that, on or after an applicable measurement date,
        Ironclad delivers written notice that AMS’ inventory shrinkage level exceeds the
        maximum level permitted hereunder (which notice shall include AMS’ validated
        information relevant to Ironclad’s calculation thereof including any Discrepancy
        Research submitted by AMS), AMS shall, within thirty (30) days of Ironclad’s
        delivery of such notice, pay to Ironclad the amount of any such excess inventory
        shrinkage. Notwithstanding the foregoing, AMS is not responsible for inventory
        shrinkage where AMS is unable to receive inventory in accordance with the
        procedures described above, or as described separately to Ironclad in writing,
        due to circumstances outside of AMS control (i.e. rush situations, no supplied
        paperwork, etc.). In the course of providing the Services, AMS shall at all
        times comply with, and provide its Services in accordance with, any and all
        routing guides, shipping instructions or other instructions provided by Ironclad
        from time to time (the “Instructions”). In the event that, in any given calendar
        quarter, Ironclad incurs, as a result of the failure by AMS to comply with
        such
        Instructions, any third party costs, expenses or charges, including, without
        limitation, customer chargebacks or other charges imposed on Ironclad by
        its
        customers or other third parties, in an amount that exceeds 0.5% of the net
        revenue Ironclad actually receives from the sale of Ironclad inventory processed
        by AMS in such calendar quarter (the “Charges”), Ironclad shall provide notice
        thereof (which notice may be made through electronic mail) to AMS, and for
        a
        period of thirty (30) days thereafter, Ironclad shall use its commercially
        reasonable efforts, working in collaboration with AMS, to obtain from the
        applicable customer or third party a reimbursement or credit for such Charges.
        In the event that, on or before the expiration of such thirty (30) day period,
        the parties are not able to obtain a reimbursement or credit of such Charges,
        AMS shall pay and reimburse to Ironclad, within ten (10) days of the delivery
        of
        Ironclad’s written invoice therefore, any and all such Charges. 

      


      Insurance:  Ironclad
        agrees to maintain insurance, at its sole cost and expense, against loss
        or
        damage by fire or other casualty to Ironclad inventory on the premises of
        AMS,
        and against any claims and liability growing out of product liability,
        advertising liability or trademark or service mark, patent or copyright
        infringement. Ironclad will maintain comprehensive liability insurance,
        including products liability, covering the Products. AMS agrees that it shall
        make commercially reasonable efforts to ensure that all of its warehouses
        at
        which any merchandise or other inventory or property of Ironclad is held
        shall
        be operated and maintained in a manner that is consistent with custom and
        practice in the fulfillment industry.

       

       

      
        Advantage
          Media Services, Inc.

        29120
          Commerce Center Drive, #2 ۰ Valencia, CA 91355

        Phone:
          661/775-0611 ۰ Fax: 661/775-0613

        www.amsfulfillment.com

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

        

      Security
        Deposit:
        In cases
        where AMS is processing shipments through its own accounts (i.e. UPS, USPS,
        FedEx, LTL...etc.), Ironclad must maintain on deposit with AMS a dollar amount to
        cover average shipping and returns postage costs at all times. AMS will adjust
        the dollar amount to be deposited in accordance with estimated volumes. AMS
        will
        not ship under its own carrier account(s), and reserves the right to hold
        all
        shipments regardless of carrier account, if the amount of freight/postage
        owed
        to AMS exceeds the amount in the reserve account.
        In cases where Ironclad wishes to utilize its own carrier account, the account
        numbers must be supplied at time of account set-up. AMS will use its best
        efforts to ensure all shipments are done on the established carrier account,
        however it is acknowledged and agreed that occasional shipments for manual
        orders and special projects may inadvertently be shipped on an AMS carrier
        account, which will be invoiced to Ironclad accordingly. 

      


      Intellectual
        Property:
        AMS
        acknowledges and agrees that as between the parties, Ironclad shall, at all
        times, exclusively own all right, title, and interest in and to the intellectual
        property contained in and/or arising from its products. AMS will not grant,
        nor
        claim for itself or other affiliated entities, independent contractors, or
        employees, either expressly or impliedly, any rights, title, interest, or
        licenses to such intellectual property. Ironclad
        shall indemnify and hold AMS harmless from all third party claims alleging
        that
        Ironclad’s products infringe any copyright, trademark, or misappropriation of
        name or likeness of such third party.. If a third party claim, action, suit
        or
        proceeding is brought against AMS resulting from its Services hereunder and
        based on an allegation that Ironclad’s products infringe any copyright,
        trademark, or misappropriation of name or likeness of such third party, then
        Ironclad may at its own election (and at its own expense) (i) replace
        substantially equivalent intellectual property for the infringing item, (ii)
        modify or fix the infringing item so that it no longer infringes, or (iii)
        obtain for the benefit of AMS the right to continue using such item in
        accordance with this Agreement. If AMS is claiming indemnification pursuant
        to
        this Section, it shall promptly notify Ironclad of any such claim of which
        it
        becomes aware and shall: (i) at its own expense, provide reasonable cooperation
        to Ironclad in connection with the defense or settlement of any such claim,
        and
        (ii) at its own expense, be entitled to participate, to the extent possible
        under applicable law, in the defense of any such claim. AMS agrees that Ironclad
        shall have sole and exclusive control over the defense and settlement of
        any
        such third party claim. The liability of Ironclad regarding infringement
        of any
        copyright or other intellectual property right of any third party shall be
        limited to this Section.

      


      


      Limitation
        of Liability:
        Neither
        party to this agreement will be liable to the other party for any indirect,
        incidental, special, or consequential damages, including, without limitation,
        damages for lost opportunities, lost profits from this agreement, or lost
        savings, even if such damages are foreseeable or result from a breach of
        this
        agreement. Except in the case of AMS’ indemnification obligations hereunder,
        Ironclad agrees that AMS’ liability to Ironclad under this agreement shall be
        limited to the total amount of service fees paid by Ironclad to AMS (excluding
        3rd
        party
        charges) that pertain to or relate to the incident(s) that foster such
        liability. The provisions of this section shall survive the termination of
        this
        agreement.

      


      Indemnification:
        AMS and
        Ironclad agree that their relationship is that of independent contractors
        with
        each other, and nothing herein or about their relationship shall make one
        the
        partner, employee, or joint venturer of or with the other. In this connection,
        Ironclad acknowledges that AMS is performing services relating to the
        warehousing and fulfillment of products on behalf of Ironclad. Accordingly,
        Ironclad agrees to indemnify, defend, and hold AMS harmless from and against
        any
        third party claims, including, without limitation, claims for damages, injury
        to
        persons, fraud, etc., that may arise from Ironclad’s products, except for such
        claims arising solely out of AMS’ gross negligence or willful misconduct, or for
        such other claims for which AMS is indemnifying Ironclad hereunder, for which
        AMS shall indemnify, defend, and hold Ironclad harmless. AMS agrees to
        indemnify, defend, and hold Ironclad harmless from and against any third
        party
        claims, including, without limitation, claims for damages, injury to persons,
        fraud, etc., that may arise from (i) AMS’ Services hereunder, including, without
        limitation, from its warehousing, assembly, packaging and/or fulfillment
        of
        Ironclad products; (ii) any Instruction Charges incurred by Ironclad, or
        any
        failure by AMS to comply with the Instructions; and/or (iii) any AMS employment
        or independent contractor matters (e.g., workers compensation and/or person
        injury claims), or AMS’ operation of its business (but excluding claims for
        which Ironclad is indemnifying AMS hereunder). If a party (the “Indemnified
        Party”) is claiming indemnification pursuant to this Section, it shall promptly
        notify the other party (the “Indemnifying Party”) of any such claim of which it
        becomes aware and shall: (i) at its own expense, provide reasonable cooperation
        to the Indemnifying Party in connection with the defense or settlement of
        any
        such claim, and (ii) at its own expense, be entitled to participate, to the
        extent possible under applicable law, in the defense of any such claim. The
        Indemnified Party agrees that the Indemnifying Party shall have sole and
        exclusive control over the defense and settlement of any such third party
        claim.


      


      Confidential
        Information:
        Without
        limitation to the foregoing, each party acknowledges that the nature of the
        relationship being undertaken hereunder may require the disclosure of
        proprietary, know-how and/or confidential information of the other party,
        including but not limited to any and all information relating to Ironclad’s
        customers, or trade secrets of AMS or Ironclad, (“Confidential Information”),
        and each agrees to keep Confidential Information in the strictest of confidence
        and not to disclose Confidential Information to others or benefit from the
        use
        thereof, directly or indirectly, either during or after the termination of
        this
        relationship, without the express written consent of the party to whom such
        information belongs. Confidential Information shall exclude any information
        that
        (i) has been or is obtained by the receiving party from a source independent
        of
        the disclosing party and not receiving such information from the disclosing
        party, (ii) is or becomes generally available to the public other than as
        a
        result of an unauthorized disclosure by the disclosing party or its personnel,
        (iii) is independently developed by the receiving party without reliance
        in any
        way on the Confidential Information provided by the disclosing party, or
        (iv)
        the receiving party is required to disclose under judicial order, regulatory
        requirement (including, without limitation, regulations promulgated by the
        Securities and Exchange Commission under the Securities Act of 1933, as amended,
        or the Securities Exchange Act of 1934, as amended), or statutory requirement,
        provided that the receiving party provides written notice and an opportunity
        for
        the disclosing party to take any available protective action prior to such
        disclosure (except with respect to any disclosures arising as a result of
        the
        securities laws or any regulations promulgated thereunder).

       

       

      
        Advantage
          Media Services, Inc.

        29120
          Commerce Center Drive, #2 ۰ Valencia, CA 91355

        Phone:
          661/775-0611 ۰ Fax: 661/775-0613

        www.amsfulfillment.com

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
  

      Arbitration:
        This Agreement shall be governed by and construed in accordance with the
        laws of
        the State of California. Any controversy or claim arising out of or relating
        to
        this Agreement, or the breach thereof shall be submitted to final and binding
        arbitration before the American Arbitration Association in accordance with
        its
        Commercial Arbitration Rules and with a panel consisting of one arbitrator
        unless that number be increased by consent of both parties. The arbitrator
        shall
        have expertise in the subject matter of the dispute. However, in any arbitration
        proceeding arising under this Agreement, the arbitrator shall not have the
        power
        to change, modify or alter any express condition, term or provision hereof,
        and
        to that extent the scope of his or her authority is limited. Pre-hearing
        discovery shall not be used and the Federal Rules of Evidence, including
        all
        rules of privilege, shall apply to proceedings conducted in connection with
        the
        arbitration. Before rendering a final decision, the arbitrators will first
        act
        as friendly, disinterested parties for the purpose of helping the parties
        reach
        compromise settlements on the points in dispute. The expenses of the arbitration
        shall be borne equally between the parties to the arbitration; however, each
        party shall pay for and bear the cost of its own expert, evidence and legal
        counsel. The arbitration hearings shall be closed and the arbitration shall
        be
        completed within one hundred twenty (120) days of giving notice and filing
        of a
        demand to arbitrate with the American Arbitration Association (whichever
        shall
        first occur). Judgment on the award rendered by the arbitrator may be entered
        and enforced in any court of competent jurisdiction. The arbitration shall
        take
        place in Santa Clarita, California. The testimony, evidence, ruling and all
        associated documentation regarding any arbitration shall be considered
        confidential information, and neither party may use, disclose, or divulge
        any
        such information. Notwithstanding
        the foregoing, (A) in the event that any controversy or claim arising out
        of or
        relating to this Agreement is in an amount equal to or less than the
        jurisdictional amount specified at such time by the small claims court in
        Los
        Angeles, California, then either party shall be entitled to bypass arbitration
        and proceed to small claims court for a final determination by said small
        claims
        court of such controversy or claim, and in such instance, the parties hereto
        hereby consent and submit to the jurisdiction of the small claims court in
        Los
        Angeles, California, hereby agree that service of process on any party may
        be
        effected by certified mail, return receipt requested, postage prepaid, and
        hereby waive any objection which they may have based on improper venue or
        forum
        non conveniens to the conduct of any such suit or action in such court; and
        (B)
        in the event that any controversy or claim arising out of or relating to
        this
        Agreement is in an amount greater than the jurisdictional amount specified
        at
        such time by the small claims court in Los Angeles, California, then either
        party shall be entitled to bypass arbitration and proceed to a court of
        competent jurisdiction for a final determination by said court of such
        controversy or claim, and in such instance, the parties hereto hereby consent
        and submit to the jurisdiction of the Federal and State courts located in
        Los
        Angeles, California, hereby agree that service of process on any party may
        be
        effected by certified mail, return receipt requested, postage prepaid, and
        hereby waive any objection which they may have based on improper venue or
        forum
        non conveniens to the conduct of any such suit or action in such court. The
        provisions of this Paragraph shall survive any expiration or termination
        of this
        Agreement.

      


      


      AUTHORIZED
        SIGNATURES

      

        
          	
                  Ironclad
                    Performance Wear Corporation

                	 	
                  AMS

                
	 	 	 
	 	 	 
	
                  Authorized
                    Signature - Ironclad Performance Wear

                	 	
                  Authorized
                    Signature - Advantage Media Services, Inc.

                
	
                  Corporation

                	 	 
	 	 	 
	 	 	 
	
                  Print
                    Name - Ironclad Performance Wear Corporation

                	 	
                  Print
                    Name - Advantage Media Services, Inc.

                
	 	 	 


        

         

        
          	Date:	
                   

                	 	Date:	
                   

                


        

      

    

     

    

      Advantage
        Media Services, Inc.

      29120
        Commerce Center Drive, #2 ۰ Valencia, CA 91355

      Phone:
        661/775-0611 ۰ Fax: 661/775-0613

      www.amsfulfillment.com