WAREHOUSE SERVICES AND BAILMENT AGREEMENT
This Agreement (the "Agreement") is entered into as of February 3, 2003
(the "Effective Date"), between I/OMagic Corporation, a Nevada corporation
("I/OMagic") and Behavior Tech Computer (USA) Corp., a California corporation
("Supplier").
RECITALS
WHEREAS, Supplier desires to store certain products (the "Products") at one
or more warehouses operated by I/OMagic (any such warehouse referred to
hereafter as the "Warehouse");
WHEREAS, such Products delivered to the Warehouse shall remain Supplier's
inventory until such time as the Products are purchased from Supplier by
I/OMagic pursuant to a purchase order;
WHEREAS, Supplier has agreed to sell up to ten million dollars
($10,000,000), or an amount agreed upon by Supplier, of Products to I/OMagic;
WHEREAS, upon the completion of the sale, the purchased Products shall
become the property of I/OMagic; and
WHEREAS, the parties desire to enter into an agreement whereby I/OMagic
agrees to hold the Products in its Warehouse as Supplier's inventory until such
time as the Products are purchased by I/OMagic from Supplier.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. BAILMENT RELATIONSHIP: Supplier hereby appoints I/OMagic as its bailee
and consigns to I/OMagic the Products for warehousing and delivery in accordance
with the following terms and conditions, and I/OMagic accepts such appointment
pursuant to the terms contained herein. I/OMagic shall be bailee of the
Products for and on behalf of Supplier.
2. PRODUCTS SUBJECT TO BAILMENT: This bailment shall apply to the Products
which shall be provided to I/OMagic from time to time in such numbers as the
parties may agree. All Products shall be held by I/OMagic as Supplier's
inventory until the Products are purchased by I/OMagic from Supplier pursuant to
a purchase order. At such time, I/OMagic shall become the owner of the
purchased Products, and title to the purchased Products shall transfer from
Supplier to I/OMagic.
3. EFFECTIVE DATE: This Agreement shall become effective on the Effective
Date and shall continue in full force and effect until terminated as provided
below.
4. DELIVERY OF PRODUCT TO WAREHOUSE: Supplier shall cause the Products to be
delivered to the Warehouse located at 1300 E. Wakeham Avenue, Santa Ana, CA
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92705, or any other warehouses operated by I/OMagic as agreed upon by Supplier,
at Supplier's sole cost and risk of loss.
5. I/OMAGIC LIABILITY FOR PRODUCT DAMAGE: I/OMagic shall be liable for all
loss or damage to the Products caused by I/OMagic's acts or omissions.
6. The parties agree that any damage or loss freight claims filed against
I/OMagic under this Agreement will be settled within thirty (30) days of a
complete filing. The parties agree that I/OMagic's care, custody, and control
over the Products shall commence when the Products are being unloaded at
I/OMagic's facility.
7. I/OMagic shall be liable for loss of or injury to the Products while in
I/OMagic's care, custody, and control caused by I/OMagic's gross negligence.
8. NO WAREHOUSE FEES: The parties agree that the Products are being held at
I/OMagic's Warehouse so as to allow I/OMagic immediate access to the Products
upon the purchase of the same. In receiving and exchange of such benefits,
I/OMagic shall not charge any warehouse fees to Supplier.
9. I/OMAGIC'S OBLIGATIONS: During the term of this Agreement, I/OMagic
agrees to maintain an accurate inventory management system, record tracking all
transactions related to the Products. From time to time during regular business
hours, Supplier or its authorized representative shall have access to such
inventory management tracking information and may examine such records and
I/OMagic's accounts related to the Products.
10. I/OMagic shall furnish Supplier with weekly and monthly statements
indicating all Products received and all sales transactions during the
applicable period, as well as the currently inventory. Upon Supplier's request,
I/OMagic shall furnish Supplier with updated statements indicating the extent of
current inventory on as as-needed basis.
11. I/OMagic shall obtain all-risk property insurance in an amount equal to
fully insure all Products in its care, custody and control, and will list
Supplier as a loss payee on such policy where Supplier's interest appears.
I/OMagic will provide Supplier with a certificate of insurance.
12. STORAGE: At all times that the Products are in its possession or under
its control, I/OMagic shall store and maintain the Products in suitable storage
facilities in accordance with all applicable laws and Supplier's guidelines and
instructions as revised from time to times as mutually agreed to between
I/OMagic and Supplier.
13. MANAGEMENT: I/OMagic agrees to appoint at least one person to manage
the Products. This person shall be in charge of providing updated reports to
Supplier on a regular basis regarding inventory, sale transactions, shipments
and other relevant activities.
14. SALE AND PURCHASE OF PRODUCTS: At any time during the term of this
Agreement, I/OMagic may purchase Supplier's Products held in its Warehouse by
issuing a purchase order to the Supplier. Once the Supplier has accepted the
purchase order in writing, the purchase products may be released from bailment
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to I/OMagic. I/OMagic must receive authorization from the Supplier for the
purchase order before Products may be released to I/OMagic.
15. EXPIRATION AND TERMINATION: This Agreement may be terminated with or
without cause by any party upon sixty (60) day prior written notice to the other
parties; provided, however, any such termination shall not relieve I/OMagic or
Supplier from its obligation due at such time of termination. Upon termination
of this Agreement, I/OMagic shall immediately send all Products in its
possession to Supplier, at Supplier's cost and risk of loss, or to such other
location as Supplier may designate in writing. Notwithstanding the foregoing,
if any party breaches this Agreement, either of the nonbreaching parties may
terminate this Agreement without notice if the breaching party fails to cure
such breach within fifteen (15) days after receiving written notice thereof.
16. PAYMENT OF TAX. All property tax on the stored Products shall be the
responsibility of the Supplier. Each party shall be responsible for reporting
its own income derived from this Agreement and for the payment of its own income
tax.
17. ADVANCE SHIPMENT NOTIFICATION: Supplier shall provide I/OMagic with
shipment notices of Product arriving into the Warehouse.
18. ATTONEYS' FEES: Should any action be commenced to interpret or enforce
the provisions of this Agreement by any party, the prevailing party or parties
shall entitled to reasonable attorneys' fees in addition to any other relief to
which it may be entitled.
19.GOVERNING LAW, VENUE: This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to its
conflict of laws provisions. The sole and exclusive jurisdiction for the
resolution of disputes relating to this Agreement shall be the state or federal
courts in the State of California. The parties hereby consent and submit to the
personal jurisdiction of such courts for the purpose of litigating any such
action.
20. COMPLETE AGREEMENT; MODIFICATION; SEVERABILITY; WAIVER: This Agreement
is a complete statement of the rights and responsibilities of the parties and
supersedes any prior negotiations, agreements or understandings, whether written
or oral, that may have been made or entered into with regard to the Services to
be provided hereunder. If any conflict exists between this Agreement and any
prior agreement between the parties or between this Agreement and any terms and
conditions or purchase or sale hereafter used by the parties, this Agreement
shall prevail. No modification of this Agreement will be effective unless it is
in writing and signed by authorized representatives of the parties. The
provisions of this Agreement are severable; if any provision is unenforceable,
the remaining provisions will remain in effect. Failure to enforce any
provision of this Agreement shall neither be deemed a waiver of such provision
nor deemed a waiver of future enforcement of that or any other provision.
21. RELATIONSHIP OF THE PARTIES: None of the parties is designated or
appointed an agent or representative to any of the other parties and no party
will have any authority, either express or implied, to create or assume any
agency or obligation on behalf of, or in the name of, the other parties. No
party will have any responsibility for, or obligations to, the employees of the
other.
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22. ASSIGNMENT: No party may assign this Agreement or any right or
obligation under it without the express prior written consent of the other
parties. Any assignment in contravention to this Agreement shall be void.
23. INDEMNIFICATION: Subject to the limitations set forth herein, each party
hereby agrees to indemnify, defend and hold harmless the other parties and their
directors, officers and employees from and against any and all claims, losses,
demands, costs or liabilities, including reasonable attorneys' fees, resulting
from or in connection with third party claims arising from such part's breach of
this Agreement, or such part's acts or omissions while performing this
Agreement. Such indemnification shall survive the termination of this
Agreement.
24. NOTICE: Any notices required or authorized to be given will be in
writing and will be deemed given when received via certified or registered mail,
postage prepaid, or via any other public or private delivery service to the
following address, or at such other addresses as the parties may from time to
time designate by written notice to the other party hereto:
If to I/OMagic: If to Supplier:
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I/OMagic Corporation Behavior Tech Computer Corp.
1300 E. Wakeham Avenue 4180 Business Center Drive
Santa Ana, CA 92705 Fremont, CA 94538
Attn: Tony Shahbaz Attn:
25. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
26. SUCCESSORS: This Agreement and all of the provisions hereof shall be
binding upon, inure to the benefit of, and be enforceable by, the parties hereto
and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BEHAVIOR TECH COMPUTER (USA) CORP. I/OMAGIC CORPORATION
By: /s/ Mei Lin Hsu By: /s/ Tony Shahbaz
Signature: /s/ Mei Lin Hsu Signature: /s/ Tony Shahbaz
Title: /s/ VP in Sales Title: /s/ President