TOOLOTS

CONSIGNMENT AGREEMENT

Toolots Inc. (“We” and “Us”) provides Consignment services for Your Products, subject to these Terms of Service.  These Terms of Service are part of the Merchant Agreement and concern and apply only to your participation in Consignment of your orders by Toolots (the “Consignment Program”). BY REGISTERING FOR OR USING THE Consignment Program, YOU (ON BEHALF OF YOURSELF OR THE BUSINESS YOU REPRESENT) AGREE TO BE BOUND BY THESE TERMS OF SERVICE. You expressly agree that Toolots, its affiliate, or a third party may complete one or more of the Consignment and associated services outlined below. All capitalized terms herein shall have the meaning set forth in the Merchant Agreement for such term.

 1. Registration.  You must apply to participate in the Consignment Program.  Once you are accepted, you must apply to register each product that you wish to include in the Consignment Program (“Your Product”). We may refuse registration in Consignment Program for any product and any merchant for any reason, in our sole discretion.  You may at any time withdraw registration of any of Your Products from the Consignment Program.

 2. Product and Shipping Information.   

1. a. Supply of Consigned Products.   During the Term of this Agreement, you agree to:
   1. i.   provide accurate and complete information about Your Product in a format we require to participate in the Consignment Program; and
   2. ii.  promptly update Your Product information in accordance with our requirements and as necessary so that the information is at all times accurate and complete; and
   3. iii. supply and replenish inventory of Your Product in a quantity that we agree in advance to accept.  

All products you supply are subject to the terms and conditions of this Agreement and are be shipped by you at your own cost and transit risk as consigned inventory.  You retain title and full ownership of all consigned inventory until Your Products are sold. We shall hold consigned inventory as your consignee. 

1. b. Shipment of Consigned Products.  We shall receive shipments of Your Products in accordance with our standard receiving and inspection procedures. We will exercise normal and reasonable care as to consigned inventory. You will provide to us a consignment sheet listing Your Products, quantity of each product consigned to us, and other information that we may request and which we may verify.  If for any reason you dispute our verification of the quantity or other product information that we confirm receipt of, you shall notify us within three (3) days of your dispute and you shall have the right, at your expense, to inspect Your Products at our facility with at least five (5) business days advance written notice to us.   
2. c. Payment Terms. Payment terms of consigned inventory shall be pursuant to Section 12.b. of the Merchant Agreement. We will not be obligated to remit any payments to you until Your Product is sold and we have received payment from the Customer.  The price of Your Product will be determined by us and will include the payment due to us from you.   We may withhold and retain our compensation and fees due to us pursuant to the Fee Schedule from the amount to be remitted to you. 
3. d. Carrier Requirements.  We will select the carrier to ship Your Products to Customers (as defined in the Merchant Agreement) through the Consignment Program.  You must comply with standard operating procedures, weight and size restrictions, and other shipping requirements of the applicable carriers. If we provide you with the estimated shipping costs prior to shipment of Your Product, you acknowledge and agree that actual shipping costs may vary from such estimates. In addition, if the weight of the product, as determined by the applicable carrier, differs from that submitted by you to us for purposes of determining the estimated shipping costs, then: (a) you may be charged more than the estimated shipping costs if the carrier determines that such product weighs more than as submitted by you; or (b) you may be charged the full amount of the estimated shipping costs even if the carrier determines the weight to be less than that submitted by you. 
4. e. Carrier Information. You will not use our carrier account information (e.g., carrier account number, amount of shipping rates, etc.) for any purpose, nor disclose such information to any third party, and you will protect such information as Toolots's confidential information in accordance with the Confidentiality provisions of the Merchant Agreement.  As between you, us and our carrier, you will be the shipper of record, and we will be the payer of record with respect to all Units shipped to us using such discounted rates. Title and risk of loss for any product shipped using discounted rates provided by us under this Section will remain with you, and our provision of such shipping rates will not create any liability or responsibility for us with respect to any delay, damage or loss incurred during shipment. You authorize the applicable carrier to provide us with all shipment tracking information. 
5. f. 3PL Dropship Program.  On a case-by-case basis, and in our sole discretion, if you are participating in our Consignment Program, we may offer you a service to ship products that you have stored in our facility to a non-Toolots Customer on your behalf on a blind-drop ship basis.  If you elect to ship any of Your Products (as defined in the Merchant Agreement) through our 3PL Dropship Program, you may elect to use our designated carrier or select your own carrier.  Regardless of your election, you will be responsible for shipping costs on all of Your Products shipped through our 3PL Dropship Program.   You will also be subject to fees and charges set forth in our Fee Schedule for the 3PL Dropship Program.   You agree that the 3PL Dropship Program is a service offered as a convenience to you for the delivery of Your Products by third party carriers.  All services provided through the 3PL Dropship Program are subject to the terms and conditions of the Merchant Agreement and this Consignment Agreement.

 3. Shipping to Toolots.  You will be responsible for all costs incurred to ship Your Products to our designated facility (including costs of freight and transit insurance) and are responsible for payment of all customs, duties, taxes and other charges. In the case of any improperly packaged or labeled product, we may return the product to you at your expense or repackage or relabel the product and charge you an administrative fee.   If Toolots is listed on any import documentation, Toolots reserves the right to refuse to accept products covered by the import documents and any costs assessed against or incurred by Toolots will be collected from your bank account, deducted from amounts payable to you, or by other method at our election.

 4. Unapproved Products.  You will not deliver to us, and we may refuse to accept, any shipment of product that was not approved by us for participating in the Consignment Program, damaged, defective, subject to a recall or hazardous (the “Unapproved Product”). We may return or dispose of any Unapproved Product and you will be deemed to have consented to such action: (a) immediately if we determine in our sole discretion that the product creates a safety, health or liability risk to Toolots, our personnel or any third party; (b) if you fail to direct us to return or dispose of any Unapproved Product within ten (10) days after we notify you that the product has been recalled; or (c) except as otherwise provided in this Section 4, if you fail to direct us to return or dispose of any Unapproved Product within ten (10) days after we notify you that we are in possession of it. In addition, you will reimburse us for any expenses we incur in connection with any Unapproved Product, including shipping and storage expenses.

 5. Storage Services.  We will provide storage services once we confirm receipt of delivery. We will keep electronic records that track inventory of Your Products by identifying the number of products stored. We will not be required to physically mark or segregate Your Products from other inventory units owned by us, our affiliates or third parties. If we elect to commingle Your Products with such other inventory units, both parties agree that our records will be sufficient to identify which products are Your Products. We may move products among facilities. If there is a loss of or damage to any of Your Products while they are being stored, we will, as your sole remedy, reimburse you, and you will, at our request, provide us a valid tax invoice for the compensation paid to you. If we reimburse you for a product, we will be entitled to dispose of the product.  Toolots expressly disclaims any liability of a bailee or warehousemen, provided however, in the event such liability is attributed to Toolots, then this reimbursement is our total liability for any duties or obligations that we, our agents and representatives may have as a bailee or warehouseman, and your only right or remedy that you may have as a bailor. At all other times, you will be solely responsible for any loss of, or damage to, any of Your Products. Our confirmed receipt of delivery does not: (a) indicate or imply that any product has been delivered free of loss or damage, or that any loss or damage to any product later discovered occurred after confirmed receipt of delivery; (b) indicate or imply that we actually received the quantity of products specified by you for such shipment; or (c) waive, limit or reduce any of our rights under these Terms of Service. We reserve the right to impose, and change from time to time, scheduling restrictions and volume limitations on the delivery and storage of your inventory to our facilities, and you will comply with any of these restrictions or limitations.

 6. Consignment Services.  As part of the Consignment Program, we will ship products from our inventory of Your Products to the shipping address provided by the Customer or as submitted by you as part of your Consignment request. We may ship Your Products together with products purchased from other merchants. We also may ship multiple products from a single Customer order in separate shipments.

 7. Customer Returns.  We will receive and process returns of products shipped through our Consignment Program, subject to our Return Policy.  Sellable products that are properly returned will be placed back into the inventory of Your Products in the Consignment Program.  We may fulfill Customer orders for Your Products with any returned and sellable product. You will retake title of all products that are returned by Customers, whether or not the product is in our Consignment facility. 

1. a. Returns of Product to You. You may, at any time, request that Your Products be returned to you. We may return Your Products to you for any reason, including upon termination of these Terms of Service. These returned shipments will be sent to your designated shipping address. If the address we have for you is outdated or incorrect, or if we cannot make arrangements for you to pay for the return shipment, the product(s) will be deemed abandoned and we may elect to dispose of the product(s) as provided for in these Terms of Service. 
2. b. Disposal of Products.  You may, at any time, request that we dispose of your units. We may dispose of any product we are entitled to dispose of in the manner we prefer. Title to each disposed product will transfer to us at no cost to us as necessary for us to dispose of the product, and we will retain all proceeds, if any, received from the disposal of any product. 
3. c. Return or Disposal of Unapproved Products.  We will, at your direction, either return or dispose of any Customer returned product that we determine is an Unapproved Product.   We may elect to return or dispose of the Unapproved Product as provided in Section 4, and you will be deemed to have consented to our election if you fail to direct us to return or dispose of the Unapproved Product within ten (10) days after we notify you of the Unapproved Product. All returns to you and disposal of Unapproved Products and returned products will be at your cost.    
4. d. Proceeds.  We may keep all proceeds of any product that we dispose of or to which title transfers, including returned, damaged or abandoned products. You will have no security interest, lien or other claim to the proceeds that we receive in connection with the sale, Consignment and/or shipment of such products.

 8. Misdelivered, Damaged and Lost Products.  For products shipped through the Consignment Program, if the wrong item was delivered or the item was damaged, lost or missing, we will use commercially reasonable efforts to determine the cause of the misdelivery, damage or loss.  If the product is returned to us by the Customer, we will examine it and if it is saleable, we will restock the product back into your inventory.  If the product is not saleable, we will determine the appropriate remedy based on our best assessment of the cause of loss or damage, which may include filing a claim with the shipping carrier, returning the product back to you, or, if we are responsible for the cause of loss or damage, we will credit your account for the product and repair or replace it for the Customer, at our cost.  If we determine that the basis for the loss or damage is caused by you or any of your employees, agents or contractors, we will, as your sole and exclusive remedy and at our option, ship a replacement product to the Customer or process a refund to the Customer you will be responsible for all costs associated with any replacement or return. If we provide a replacement product or refund to a Customer and that Customer returns the original product to us, we will contact you to determine if you request to have the product returned to you, at your cost, or if you request that we dispose/destroy the product, which request we may accommodate in our sole discretion, and for which we may charge a reasonable service fee.

 9. Product Recalls. You will promptly notify us of any recalls or threatened recalls of any of Your Products and cooperate and assist us in connection with any recalls, including by initiating the procedures for returning items to you under our standard processes. You will be responsible for all costs and expenses you, we or any of our or your affiliates incur in connection with any recall or threatened recall of any of Your Products (including the costs to return, store, repair, liquidate or deliver to you or any vendor any of these products).

 10. Customer Service.  Excepting any specific agreement between Toolots and a merchant, we will have no Customer service obligations regarding questions and issues related to the operation, use, quality, make and other information specific to Your Product.  Our sole obligation as to these product inquiries is to pass such matters your attention at the contact you provide, and to make available a reasonable amount of information regarding the status of the Consignment of Your Products if you request it and if and to the extent we possess the requested information. You will ensure that all of your policies and messaging to your Customers regarding shipping of Your Products and other Consignment-related matters, reflect our policies and requirements, including with regard to shipping methods, returns and customer service; and, you will conspicuously display on your website(s), in emails or in other media or communications any specific disclosures, messaging, notices, and policies we require.  We will be responsible for and have sole discretion regarding all customer service issues relating to packaging, handling and shipment and Customer returns, refunds and adjustments related to products participating in the Consignment Program. We will have the right to determine whether a Customer will receive a refund, adjustment or replacement and to require you to reimburse us where we determine you have responsibility.

 11. Consignment Program Costs and Expenses. In addition to the fees and charges below, if there are any special circumstances relating to your participating in the Consignment Program, please contact us regarding fees and charges that may be in addition to the following: 

1. a. Handling and Storage Fees. Fees are per our published Fee Schedule. You will be charged the storage fees beginning on the day that the product arrives at a Consignment center and is available for Consignment by Toolots until the day we actually ship the product to your designated return location or dispose of the product. 
2. b. Shipping. We will determine the amounts charged to the Customer for shipping of Your Products, which we will report to you. In the case of shipments of products sold through the Toolots Site to our Customers that qualify for any "Free Shipping", the amounts charged to the Customer for shipping will be at our expense.   For all other Customer shipments, you will reimburse us for the actual amounts charged to us by the applicable carrier for such shipments. We may deduct reimbursements due to us from any payments due to you.

 12. Indemnity.  You will indemnify, defend and hold harmless us, our affiliates, and our and their respective officers, directors, employees, representatives and agents against any Claim that arises from or relates to: (a) Your Products (whether or not title has transferred to us, and including any product that we identify as yours regardless of whether such product is the actual item you originally sent to us), including any personal injury, death or property damage; (b) the shipment, export or delivery of Your Products; (c) any of your taxes or the collection, payment or failure to collect or pay your taxes; and, if applicable (d) any sales, use, value added, personal property, gross receipts, excise, franchise, business or other taxes or fees, or any customs, duties or similar assessments (including penalties, fines or interest on any of the foregoing) imposed by any government or other taxing authority.

 13. Release.  You, on behalf of yourself and any successors, subsidiaries, affiliates, officers, directors, shareholders, employees, assigns and any other person or entity claiming by, through, under or in concert with them (collectively, the "Releasing Parties"), irrevocably acknowledge full and complete satisfaction of and unconditionally and irrevocably release and forever fully discharge Toolots and each of our affiliates, and any and all of our and their predecessors, successors, and Affiliates, past and present, as well as each of our and their partners, officers, directors, shareholders, agents, employees, representatives, attorneys, and assigns, past and present, and each of them and all Persons acting by, through, under or in concert with any of them (collectively, the "Released Parties"), from any and all claims, obligations, demands, causes of action, suits, damages, losses, debts or rights of any kind or nature, whether known or unknown, suspected or unsuspected, absolute or contingent, accrued or unaccrued, determined or speculative (collectively, "Losses") which the Releasing Parties now own or hold or at any time have owned or held or in the future may hold or own against the Released Parties, or any of them, arising out of, resulting from, or in any way related to the storage, shipment, export or delivery of Your Products, including any tax registration or collection obligations. You, on behalf of yourself and all other Releasing Parties, recognize that you, and each of them, may have some Losses, whether in tort, product liability, contract, warranty or otherwise, against the Released Parties of which you, or any of them, are totally unaware and unsuspecting, or which may arise or accrue after the date you register for or use the Consignment Program, which the Releasing Parties are giving up by agreeing to these Terms of Service. It is your intention in agreeing to these Terms of Service and the Merchant Agreement that you will deprive the Releasing Parties of each and all such Losses and prevent the Releasing Party from asserting any such Losses against the Released Parties, or any of them. In addition to the foregoing, you acknowledge, on behalf of yourself and all other Releasing Parties that you are familiar with Section 1542 of the Civil Code of the State of California, as follows:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."

You, on behalf of yourself and all other Releasing Parties, expressly waive and relinquish any rights that you had or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the law of any other jurisdiction, to the full extent that you may lawfully waive all such rights pertaining to the subject matter of these Terms of Service.

 14. Disclaimer. WE DISCLAIM ANY DUTIES OF A BAILEE OR WAREHOUSEMAN, AND YOU WAIVE ALL RIGHTS AND REMEDIES OF A BAILOR (WHETHER ARISING UNDER COMMON LAW OR STATUTE OR OTHERWISE), RELATED TO OR ARISING OUT OF ANY POSSESSION, STORAGE OR SHIPMENT OF YOUR PRODUCTS BY US OR OUR AFFILIATES OR ANY OF OUR OR THEIR CONTRACTORS OR AGENTS.

 15. Effect of Termination.  Following any termination of the Merchant Agreement or these Terms of Service we will, as directed by you, return to you or dispose of Your Products.  If you fail to direct us to return or dispose of the Units within ten (10) days after termination, then we may elect to return and/or dispose of Your Products in whole or in part, as provided for in these Terms of Service.

 16. Tax Matters.  You understand and acknowledge that storing Your Products at our Consignment centers may create tax nexus for you in any country, state, province, or other localities in which Your Products are stored, and you will be solely responsible for any taxes owed as a result of such storage. If any taxes are assessed against us as a result of performing services for you in connection with the Consignment Program, you will be responsible for such taxes and you will indemnify and hold Toolots harmless from such taxes.

 17. Additional Representation. You represent and warrant to us that: (a) you have valid legal title to all of Your Products and all necessary rights to distribute Your Products and to perform under these Terms of Service; (b) you will deliver all of Your Products to us in new condition (or in such condition otherwise described by you in the applicable Your Product listing) and in a merchantable condition; (c) all of Your Products and packaging will comply with all applicable marking, labeling and other requirements required by law; (d) no product is or will be produced or manufactured, in whole or in part, by child labor or by convict or forced labor; (e) you and all of your subcontractors, agents and suppliers involved in producing or delivering Your Products will strictly adhere to all applicable laws, its territories and all other countries where  are produced or delivered, regarding the operation of their facilities and their business and labor practices, including working conditions, wages, hours and minimum ages of workers; and (f) that all of Your Products can be lawfully the United States, as applicable, without any license or other authorization and can be lawfully imported into, and comply with all applicable laws of, any country where you have received a Customer order for Your Product.