<PAGE>
As filed with the Securities and Exchange Commission on December 21, 1999
Registration No. 333-89737
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
BUY.COM INC.
(Exact Name of Registrant as Specified in Its Charter)
----------------
<TABLE>
<S> <C> <C>
Delaware 5734 33-0816584
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Number) Identification No.)
</TABLE>
21 Brookline
Aliso Viejo, California 92656
(949) 425-5200
(Address, Including Zip Code and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
----------------
Gregory J. Hawkins
Chief Executive Officer
BUY.COM INC.
21 Brookline
Aliso Viejo, California 92656
(949) 425-5200
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Bruce R. Hallett, Esq. Larry W. Sonsini, Esq.
Ellen S. Bancroft, Esq. Steven L. Berson, Esq.
Scott Santagata, Esq. Michael S. Russell, Esq.
Joo Ryung Kang, Esq. Thomas M. Dono, Jr., Esq.
Brobeck, Phleger & Harrison LLP Wilson Sonsini Goodrich & Rosati
38 Technology Drive Professional Corporation
Irvine, California 92618 650 Page Mill Road
(949) 790-6300 Palo Alto, California 94304
(650) 493-9300
----------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
----------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts are estimated
except the SEC and NASD registration fees. All of the expenses below will be
paid by us.
<TABLE>
<CAPTION>
Item
----
<S> <C>
SEC Registration fee............................................. $ 41,700
NASD filing fee.................................................. 15,500
Nasdaq National Market listing fee............................... 95,000
Blue sky fees and expenses....................................... 5,000
Printing and engraving expenses.................................. 275,000
Legal fees and expenses.......................................... 665,000
Accounting fees and expenses..................................... 450,000
Transfer Agent and Registrar fees................................ 2,000
Miscellaneous.................................................... 50,800
----------
Total........................................................ $1,600,000
==========
</TABLE>
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* To be filed by amendment.
Item 14. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, we can indemnify
our directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). Our bylaws (Exhibit 3.4 to this registration statement)
provide that we will indemnify our directors and officers to the fullest extent
permitted by law and require us to advance litigation expenses upon our receipt
of an undertaking by the director or officer to repay such advances if it is
ultimately determined that the director or officer is not entitled to
indemnification. Our bylaws further provide that rights conferred under such
bylaws do not exclude any other right such persons may have or acquire under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise.
Our certificate of incorporation (Exhibit 3.2 to this registration
statement) provides that, pursuant to Delaware law, our directors shall not be
liable for monetary damages for breach of the directors' fiduciary duty of care
to us and our stockholders. This provision in the certificate of incorporation
does not eliminate the duty of care, and in appropriate circumstances equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to us or our
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental
laws.
In addition, our certificate of incorporation provides that we shall
indemnify our directors and officers if such persons acted (1) in good faith,
(2) in a manner reasonably believed to be in or not opposed to our best
interests, and (3) with respect to any criminal action or proceeding, with
reasonable cause to believe such conduct was lawful. The certificate of
incorporation also provides that, pursuant to Delaware law, our directors shall
not be liable for monetary damages for breach of the directors' fiduciary duty
of care to us and our stockholders. This provision in the certificate of
incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as injunctive or other forms of non-
monetary relief will
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<PAGE>
remain available under Delaware law. In addition, each director will continue
to be subject to liability for breach of the director's duty of loyalty to us
for acts or omissions not in good faith or involving intentional misconduct,
for knowing violations of law, for actions leading to improper personal benefit
to the director, and for payment of dividends or approval of stock repurchases
or redemptions that are unlawful under Delaware law. The provision also does
not affect a director's responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws. The certificate
of incorporation further provides that we are authorized to indemnify our
directors and officers to the fullest extent permitted by law through the
bylaws, agreement, vote of stockholders or disinterested directors, or
otherwise. We intend to obtain directors' and officers' liability insurance in
connection with this offering.
In addition, we have entered or, concurrently with this offering, will
enter, into agreements to indemnify our directors and certain of our officers
in addition to the indemnification provided for in the certificate of
incorporation and bylaws. These agreements will, among other things, indemnify
our directors and some of our officers for certain expenses (including
attorneys fees), judgments, fines and settlement amounts incurred by such
person in any action or proceeding, including any action by or in our right, on
account of services by that person as a director or officer of BUY.COM or as a
director or officer of any of our subsidiaries, or as a director or officer of
any other company or enterprise that the person provides services to at our
request.
The purchase agreement (Exhibit 1.1 to this registration statement) provides
for indemnification by the underwriters of us and our officers and directors,
and by us of the underwriters, for certain liabilities arising under the
Securities Act or otherwise in connection with this offering.
Item 15. Recent Sales of Unregistered Securities
The following is a summary of our transactions since our formation in June
1997, involving sales of our securities that were not registered under the
Securities Act of 1933, as amended:
(1) On June 9, 1997, BuyComp, LLC issued 9,000,000 units to Scott and Audrey
Blum for $50,000.
(2) On August 18, 1998, we sold 81,331,078 shares of common stock and
3,043,921 shares of Series A convertible participating preferred stock to The
Scott A. Blum Separate Property Trust u/t/d 8/2/95 in exchange for 9,000,000
units of BuyComp, LLC.
(3) On August 18, 1998, we sold an aggregate of 9,131,784 shares of Series A
convertible participating preferred stock for an aggregate purchase price of
approximately $15,000,000 to SOFTBANK Technology Ventures IV, L.P. and SOFTBANK
Technology Advisors Fund L.P.
(4) On December 3, 1998, a wholly-owned subsidiary of BUY.COM, BUY.COM
ENTERTAINMENT, Inc., acquired SpeedServe, Inc. in a stock-for-stock
transaction. As consideration for all 10,000 outstanding shares of SpeedServe,
Inc., we issued 5,529,571 shares of our common stock to the shareholders of
SpeedServe, Inc.
(5) On March 1, 1999, we issued 112,500 shares of our common stock to the
Benson York Group, Inc. in exchange for certain domain names.
(6) On March 10, 1999, we issued an aggregate of 163,058 shares of common
stock for an aggregate purchase price of approximately $623,000 to Ingram
Entertainment Inc., SOFTBANK Technology Advisors Fund L.P. and SOFTBANK
Technology Ventures IV, L.P.
(7) On April 5, 1999, we issued an aggregate of 25,068 shares of common
stock for an aggregate purchase price of approximately $85,000 to Ingram
Entertainment Inc., SOFTBANK Technology Advisors Fund L.P. and SOFTBANK
Technology Ventures IV, L.P.
(8) On April 8, 1999, we issued 15,684 shares of common stock to Harrison
Uhl in exchange for a domain name.
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<PAGE>
(9) On June 29, 1999, we issued an aggregate of 129,168 shares of common
stock for an aggregate purchase price of approximately $1,180,000 to Ingram
Entertainment Inc., SOFTBANK Technology Advisors Fund L.P. and SOFTBANK
Technology Ventures IV, L.P.
(10) On July 19, 1999, we issued a warrant to purchase 1,250,000 shares of
common stock to United Airlines, Inc. for $16.00 per share. We also issued
another warrant for 61,364 shares of common stock at an exercise price of
$11.00.
(11) On July 17, 1999, we issued 40,625 shares of common stock to Raj Patel
in exchange for a domain name.
(12) In October 1999, we sold an aggregate of 9,923,277 shares of our Series
B convertible participating preferred stock for an aggregate purchase price of
approximately $90,000,000 to SOFTBANK Capital Partners L.P., SOFTBANK Capital
Advisors Fund L.P., SOFTBANK Technology Ventures IV L.P., SOFTBANK Technology
Advisors Fund L.P., SOFTBANK Technology Ventures V, L.P., ePartners and
Vivendi.
(13) On October 8, 1999, we issued a warrant to Harpeth Holdings Inc. to
purchase 625,000 shares of common stock for $9.07 per share in consideration
for our supply and fulfillment agreements with Ingram Book Company and Ingram
Fulfillment Services Inc.
(14) On October 25, 1999, we acquired BuyGolf.com, Inc. in a stock for stock
transaction. As consideration for all of the outstanding capital stock of
BuyGolf.com, we issued 2,589,329 shares of our common stock to the stockholders
of BuyGolf.com.
(15) On October 25, 1999, we issued 1,125,000 shares of common stock to the
PGA TOUR, Inc. in exchange for a sponsorship agreement with them.
(16) Between July 1, 1997 and June 19, 1998, our predecessor entity,
BuyComp, LLC granted 812,500 options to employees, non-employee directors and
consultants to purchase units of BuyComp LLC at an exercise price of $0.10 per
unit. All options were assumed under our 1998 Stock Option/Stock Issuance Plan.
(17) Between September 1, 1998 and September 14, 1998, we granted options to
purchase 1,148,437 shares of our common stock at an exercise price of $1.64 per
share to certain employees and consultants. Between October 6, 1998 and March
10, 1999, we granted options to purchase 12,031,940 shares of common stock at
an exercise price of $3.83 per share to employees, non-employee directors and
consultants. On November 23, 1998 and December 15, 1998 we granted options to
purchase an aggregate of 23,437 shares of common stock at an exercise price of
$4.00 per share to a consultant. From April 1, 1999 to April 29, 1999, we
granted options to purchase 148,125 shares of common stock at an exercise price
of $6.79 per share to certain employees and a consultant. On June 29, 1999, we
granted options to purchase 688,125 shares of common stock at an exercise price
of $9.14 per share to employees and consultants. On August 1, 1999, we granted
options to purchase 386,887 shares of common stock at an exercise price of
$9.14 per share to employees and consultants. Between September 2, 1999 and
October 11, 1999, we granted options to purchase 3,156,996 shares of common
stock at an exercise price per share of $9.14 to employees and consultants.
(18) Between January 1, 1999 and July 31, 1999, we issued and sold
28,617,187 shares of common stock upon the exercise of stock options for
aggregate consideration of $20,350.
All sales and issuances of securities for amounts less than $5 million
involved all accredited investors or less than 35 other purchasers, did not
involve any general solicitation on advertising and were deemed to be exempt
from registration under Rule 505 promulgated under the Securities Act. All
sales and issuances for amounts in excess of $5 million involved all accredited
investors, did not involve any general solicitation or advertising and were
deemed exempt from registration under Section 4(2) of the Securities Act or
Rule 506 promulgated thereunder. All options were granted under Rule 701
promulgated under the Securities Act or Section 4(2) of the Securities Act.
Appropriate legends are affixed to the stock certificates issued in such
II-3
<PAGE>
transactions. Similar legends were imposed in connection with any subsequent
sales of any such securities. All recipients either received adequate
information about BUY.COM or had access, through employment or other
relationships, to such information.
Item 16. Exhibits and Financial Statement Schedules
The following Exhibits are attached hereto and incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
1.1* Form of Purchase Agreement.
2.1** Agreement and Plan of Merger and Reorganization dated October
26, 1998 by and among BUY.COM, Speedserve.com Inc., Ingram
Entertainment Inc., David C. Mason and Michael G. Mason.
2.2** Agreement and Plan of Merger and Reorganization dated October
25, 1999 by and among BUY.COM INC., BGLF Acquisition
Corporation, BuyGolf.com, Inc. and all of the stockholders
listed therein.
3.1** Amended and Restated Certificate of Incorporation of BUY.COM.
3.2* Proposed Amended and Restated Certificate of Incorporation of
BUY.COM.
3.3** Bylaws of BUY.COM INC.
3.4* Proposed Bylaws of BUY.COM.
4.1* See Exhibit 3.1, 3.2, 3.3 and 3.4 for provisions of the
BUY.COM's Certificate of Incorporation and Bylaws defining the
rights of holders of BUY.COM's common stock.
4.2* Specimen common stock certificates.
5.1* Opinion of Brobeck, Phleger and Harrison LLP.
9.1** Voting Trust Agreement dated June 7, 1999 by and between Scott
Blum, The Scott A. Blum Separate Property Trust, BUY.COM and
certain of BUY.COM's outside directors.
9.2** Amended and Restated Voting Trust Agreement dated October 26,
1999 by and between Scott Blum, The Scott A. Blum Separate
Property Trust, BUY.COM and certain of BUY.COM's outside
directors.
10.1** Third Amended and Restated Investors' Rights Agreement dated
September 2, 1999 by and among BUY.COM and the parties named
therein.
10.2** Voting Agreement dated December 3, 1998 by and among BUY.COM
and the Stockholders named therein.
10.3**+ Supply Agreement dated December 3, 1998 by and between Ingram
Entertainment Inc. and BUY.COM's wholly-owned subsidiary.
10.4+ Order Fulfillment Agreement dated February 1, 1999 by and
between BUY.COM and i.FILL, a division of Valley Media, Inc.
10.5+ Merchandising and Supply Agreement dated April 19, 1999 by and
between BUY.COM and Nashville Computer Liquidators, L.P.
10.6+ Master Service Agreement dated October 1, 1998 by and between
BUY.COM and SOFTBANK Services Group.
10.7+ Resale Agreement dated March 10, 1999 by and between BUY.COM
and Ingram Micro, Inc.; Amendment dated August 11, 1999.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
10.8* Employment Agreement dated March 1, 1999 by and between BUY.COM
and Gregory Hawkins; Amendment No. 1 to the Employment
Agreement dated July , 1999.
10.9** 1998 Stock Option/Stock Issuance Plan.
10.12* 1999 Stock Incentive Plan.
10.13* 1999 Employee Stock Purchase Plan.
10.14** Deed of Trust dated December 23, 1998 by and between BUY.COM
and the Bank of Yorba Linda for the property located at 21
Brookline, Aliso Viejo, California 92656.
10.15** Loan Agreement and related documents dated December 23, 1998 by
and between BUY.COM and the Bank of Yorba Linda.
10.16** Industrial Lease dated May 12, 1999 by and between BUY.COM and
The Scott A. Blum Separate Property Trust u/d/t 8/2/95.
10.17** Summit Lease dated June 1999 by and between BUY.COM and
AEW/Parker II, LLC.
10.18** Operating Agreement of BUYTRAVEL.COM LLC dated July 19, 1999.
10.19** Marketing and Services Agreement dated July 19, 1999 by and
between BUY.COM and United Air Lines, Inc.
10.20** Common Stock Purchase Warrant dated July 19, 1999 by and
between BUY.COM and United Air Lines, Inc.
10.21** Credit Agreement dated July 20, 1999 by and between BUY.COM and
certain commercial lending institutions and The Bank of Nova
Scotia.
10.22** Promissory Note dated July 20, 1999 by and between BUY.COM and
The Bank of Nova Scotia.
10.23** Common Stock Purchase Warrant dated July 20, 1999 by and
between BUY.COM and The Bank of Nova Scotia.
10.24** Series A Convertible Participating Preferred Stock Agreement
dated August 18, 1998 by and between BUY.COM and certain
investors.
10.25** Promissory Note dated May 26, 1999 by and between BUY.COM and
The Scott A. Blum Separate Property Trust u/d/t 8/2/95.
10.26** Agreement dated May 26, 1999 by and between BUY.COM and The
Scott A. Blum Separate Property Trust u/d/t 8/2/95, Waiver of
Certain Rights, dated August 5, 1999.
10.27** Form of Option Agreement pursuant to 1998 Stock Option/Stock
Issuance Plan.
10.28** Non-Competition Agreement dated December 3, 1998 by and between
BUY.COM, BUY.COM's wholly-owned subsidiary, Ingram
Entertainment, Inc. and David Ingram.
10.29** Promissory Note dated August 16, 1999 by and between the Scott
A. Blum Separate Property Trust u/d/t 8/2/95.
10.30** Series B Convertible Participating Preferred Stock Purchase
Agreement dated September 2, 1999 by and between BUY.COM and
certain investors.
10.31** Common Stock Purchase Warrant dated October 8, 1999 by and
between BUY.COM and Harpeth Holdings Inc.
10.32** Non-Competition Agreement dated October 25, 1999 by and between
BUY.COM INC., BuyGolf.com, Inc. and Bradford W. Allen.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description
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<C> <S>
10.33+ Letter of Intent dated September 2, 1999 by and between BUY.COM
INC. and SOFTBANK America, Inc.
10.34** Common Stock Issuance Agreement dated October 22, 1999 by and
between BUY.COM INC. and PGA TOUR, Inc.
10.35* Sponsorship Letter Agreement dated October 22, 1999 by and
between BUY.COM INC. and PGA TOUR, Inc.
10.36+ Agreement dated May 3, 1999 by and between BuyGolf.com, Inc.
and Las Vegas Golf & Tennis; First Amendment dated September
10, 1999.
10.37+ Memorandum of Understanding dated October 8, 1999 by and
between BUY.COM INC. and the Ingram Book Group.
10.38+ Ingram Fulfillment Services, Inc. Agreement dated October 8,
1999 by and between BUY.COM INC. and Ingram Fulfillment
Services, Inc.
21.1** Subsidiaries of BUY.COM.
23.1* Consent of Brobeck, Phleger & Harrison LLP (Included in Exhibit
5.1 hereto).
23.2** Consent of Arthur Andersen LLP.
23.3** Consent of Message Media.
24.1** Power of Attorney (Included on signature pages hereto).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed by the Registrant with the Commission.
+ Confidential treatment is requested for certain confidential portions of
this exhibit pursuant to Rule 406 under the Securities Act. In accordance
with Rule 406, these confidential portions have been omitted from this
exhibit and filed separately with the Commission.
(b) Financial Statement Schedules
Schedules have been omitted because the information required to be set forth
therein is not applicable or is shown in the financial statements or notes
thereto.
Item 17. Undertakings
The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Purchase Agreement certificates in such denominations
and registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
BUY.COM pursuant to the foregoing provisions, or otherwise, BUY.COM has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by BUY.COM of expenses
incurred or paid by a director, officer or controlling person of BUY.COM in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, BUY.COM will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus as filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by BUY.COM pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and this offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, BUY.COM has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Aliso Viejo,
State of California, on the 21st day of December, 1999.
BUY.COM INC.
/s/ Mitch C. Hill
By: _______________________________
Mitch C. Hill,
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chief Executive Officer and December 21, 1999
_________________________________ Director (principal executive
Gregory J. Hawkins officer)
/s/ Mitch C. Hill Chief Financial Officer December 21, 1999
_________________________________ (principal financial and
Mitch C. Hill accounting officer)
* Director December 21, 1999
_________________________________
William L. Burnham
* Director December 21, 1999
_________________________________
David B. Ingram
* Director December 21, 1999
_________________________________
Donald M. Kendall
* Director December 21, 1999
_________________________________
Charles W. Richion
* Director December 21, 1999
_________________________________
James B. Roszak
* Director December 21, 1999
_________________________________
Edward S. Russell
* Director December 21, 1999
_________________________________
John Sculley
* Director December 21, 1999
_________________________________
Wayne T. Thorson
/s/ Mitch C. Hill
*By: ____________________________
Mitch C. Hill,
Attorney-in-Fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
1.1* Form of Purchase Agreement.
2.1** Agreement and Plan of Merger and Reorganization dated October
26, 1998 by and among BUY.COM, Speedserve.com Inc., Ingram
Entertainment Inc., David C. Mason and Michael G. Mason.
2.2** Agreement and Plan of Merger and Reorganization dated October
25, 1999 by and among BUY.COM INC., BGLF Acquisition
Corporation, BuyGolf.com, Inc. and all of the stockholders
listed therein.
3.1** Amended and Restated Certificate of Incorporation of BUY.COM.
3.2* Proposed Amended and Restated Certificate of Incorporation of
BUY.COM.
3.3** Bylaws of BUY.COM INC.
3.4* Proposed Bylaws of BUY.COM.
4.1* See Exhibit 3.1, 3.2, 3.3 and 3.4 for provisions of the
BUY.COM's Certificate of Incorporation and Bylaws defining the
rights of holders of BUY.COM's common stock.
4.2* Specimen common stock certificates.
5.1* Opinion of Brobeck, Phleger and Harrison LLP.
9.1** Voting Trust Agreement dated June 7, 1999 by and between Scott
Blum, The Scott A. Blum Separate Property Trust, BUY.COM and
certain of BUY.COM's outside directors.
9.2** Amended and Restated Voting Trust Agreement dated October 26,
1999 by and between Scott Blum, The Scott A. Blum Separate
Property Trust, BUY.COM and certain of BUY.COM's outside
directors.
10.1** Third Amended and Restated Investors' Rights Agreement dated
September 2, 1999 by and among BUY.COM and the parties named
therein.
10.2** Voting Agreement dated December 3, 1998 by and among BUY.COM
and the Stockholders named therein.
10.3**+ Supply Agreement dated December 3, 1998 by and between Ingram
Entertainment Inc. and BUY.COM's wholly-owned subsidiary.
10.4+ Order Fulfillment Agreement dated February 1, 1999 by and
between BUY.COM and i.FILL, a division of Valley Media, Inc.
10.5+ Merchandising and Supply Agreement dated April 19, 1999 by and
between BUY.COM and Nashville Computer Liquidators, L.P.
10.6+ Master Service Agreement dated October 1, 1998 by and between
BUY.COM and SOFTBANK Services Group.
10.7+ Resale Agreement dated March 10, 1999 by and between BUY.COM
and Ingram Micro, Inc.; Amendment dated August 11, 1999.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
10.8* Employment Agreement dated March 1, 1999 by and between BUY.COM
and Gregory Hawkins; Amendment No. 1 to the Employment
Agreement dated July , 1999.
10.9** 1998 Stock Option/Stock Issuance Plan.
10.12* 1999 Stock Incentive Plan.
10.13* 1999 Employee Stock Purchase Plan.
10.14** Deed of Trust dated December 23, 1998 by and between BUY.COM
and the Bank of Yorba Linda for the property located at 21
Brookline, Aliso Viejo, California 92656.
10.15** Loan Agreement and related documents dated December 23, 1998 by
and between BUY.COM and the Bank of Yorba Linda.
10.16** Industrial Lease dated May 12, 1999 by and between BUY.COM and
The Scott A. Blum Separate Property Trust u/d/t 8/2/95.
10.17** Summit Lease dated June 1999 by and between BUY.COM and
AEW/Parker II, LLC.
10.18** Operating Agreement of BUYTRAVEL.COM LLC dated July 19, 1999.
10.19** Marketing and Services Agreement dated July 19, 1999 by and
between BUY.COM and United Air Lines, Inc.
10.20** Common Stock Purchase Warrant dated July 19, 1999 by and
between BUY.COM and United Air Lines, Inc.
10.21** Credit Agreement dated July 20, 1999 by and between BUY.COM and
certain commercial lending institutions and The Bank of Nova
Scotia.
10.22** Promissory Note dated July 20, 1999 by and between BUY.COM and
The Bank of Nova Scotia.
10.23** Common Stock Purchase Warrant dated July 20, 1999 by and
between BUY.COM and The Bank of Nova Scotia.
10.24** Series A Convertible Participating Preferred Stock Agreement
dated August 18, 1998 by and between BUY.COM and certain
investors.
10.25** Promissory Note dated May 26, 1999 by and between BUY.COM and
The Scott A. Blum Separate Property Trust u/d/t 8/2/95.
10.26** Agreement dated May 26, 1999 by and between BUY.COM and The
Scott A. Blum Separate Property Trust u/d/t 8/2/95, Waiver of
Certain Rights, dated August 5, 1999.
10.27** Form of Option Agreement pursuant to 1998 Stock Option/Stock
Issuance Plan.
10.28** Non-Competition Agreement dated December 3, 1998 by and between
BUY.COM, BUY.COM's wholly-owned subsidiary, Ingram
Entertainment, Inc. and David Ingram.
10.29** Promissory Note dated August 16, 1999 by and between the Scott
A. Blum Separate Property Trust u/d/t 8/2/95.
10.30** Series B Convertible Participating Preferred Stock Purchase
Agreement dated September 2, 1999 by and between BUY.COM and
certain investors.
10.31** Common Stock Purchase Warrant dated October 8, 1999 by and
between BUY.COM and Harpeth Holdings Inc.
10.32** Non-Competition Agreement dated October 25, 1999 by and between
BUY.COM INC., BuyGolf.com, Inc. and Bradford W. Allen.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
10.33+ Letter of Intent dated September 2, 1999 by and between BUY.COM
INC. and SOFTBANK America, Inc.
10.34** Common Stock Issuance Agreement dated October 22, 1999 by and
between BUY.COM INC. and PGA TOUR, Inc.
10.35* Sponsorship Letter Agreement dated October 22, 1999 by and
between BUY.COM INC. and PGA TOUR, Inc.
10.36+ Agreement dated May 3, 1999 by and between BuyGolf.com, Inc.
and Las Vegas Golf & Tennis; First Amendment dated September
10, 1999.
10.37+ Memorandum of Understanding dated October 8, 1999 by and
between BUY.COM INC. and the Ingram Book Group.
10.38+ Ingram Fulfillment Services, Inc. Agreement dated October 8,
1999 by and between BUY.COM INC. and Ingram Fulfillment
Services, Inc.
21.1** Subsidiaries of BUY.COM.
23.1* Consent of Brobeck, Phleger & Harrison LLP (Included in Exhibit
5.1 hereto).
23.2** Consent of Arthur Andersen LLP.
23.3** Consent of Message Media.
24.1** Power of Attorney (Included on signature pages hereto).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed by the Registrant with the Commission.
+ Confidential treatment is requested for certain confidential portions of
this exhibit pursuant to Rule 406 under the Securities Act. In accordance
with Rule 406, these confidential portions have been ommitted from this
exhibit and filed separately with the Commission.
<PAGE>
EXHIBIT 10.4
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ORDER FULFILLMENT AGREEMENT
This Order Fulfillment Agreement ("Agreement") is entered into effective as of
the 1st day of February 1999, by and between Buy.com, Inc. ("Retailer") and
i.FILL, a division of Valley Media, Inc. ("Valley").
BACKGROUND
A. Valley is a distributor of pre-recorded music products ("Product")
B. Valley has created databases known as "audiofile" and audiotrax" containing
information regarding Product.
C. i.FILL provides to various retailers "direct-to-consumer" order fulfillment
services, pursuant to which i.FILL picks, packs and ships Product to the
retailer's customers.
D. Retailer intends to operate on the World Wide Web an "on-line retail store"
(the "Site") through which it intends to sell Product.
AGREEMENT
Subject to the terms and conditions set forth below, the parties agree as
follows:
1. BASIC AGREEMENT. Retailer and i.FILL agree to develop a computer and
customer service interface for the purposes of conducting small order
Product transactions via an on-line music store and other direct response
marketing efforts. Retailer will build and maintain a web site. Retailer
will also conduct all marketing and merchandising efforts, collect all
orders and send such orders to i.FILL via EDI. i.FILL will be responsible
for picking, packing and shipping the orders directly to Retailer's
customers.
2. EXCLUSIVITY. i.FILL will be the exclusive supplier of Product and related
Product order fulfillment services for Retailer.
3. TECHNICAL ASSISTANCE. i.FILL shall provide technical assistance to Retailer
for the testing of their EDI transmission of orders to Valley's Bulletin
Board System or FTP server.
4. AUDIOFILE DATABASE. i.FILL will license the audiofile License Agreement
attached hereto as Exhibit A for an annual license fee of [***]. The fee for
---
the first year of the initial term of this Agreement is due and payable on
the date of this Agreement. The fees for the subsequent years of the initial
term of this Agreement are due and payable upon the anniversary dates of
this Agreement.
5. AUDIOTRAX DATABASE. i.FILL will license the audiotrax database to Retailer
under terms and conditions set forth in the audiotrax License Agreement
attached hereto as Exhibit B for an annual license fee of [***]. The fee for
---
the first year
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
of the initial term of this Agreement is due and payable on the date of this
Agreement. The fees for the subsequent years of the initial term of this
Agreement are due and payable upon the anniversary dates of this Agreement.
6. INCREMENTAL MARKETING DOLLARS. i.FILL will provide Incremental Marketing
Dollars (IMD) to Retailer which includes co-op advertising funds and market
development funds. Retailer agrees to utilize Valley as its exclusive agency
for procurement of such funds relating to Product. i.FILL will credit
Retailer IMD funds procured less [***]. Should Retailer meet its minimum
annual net Product sales goal ("Volume Goal") for any given year as
described in Section 7 herein and has adhered to and obeyed all [***],
i.FILL will guarantee the procurement of IMD funds to be [***] of Retailer's
annual net Product sales for that year. If, in any year as defined in
Section 7, Retailer has met its Volume Goal and adhered to [***], but i.FILL
has not yet procured [***] of Retailer's annual net Product sales in IMD
funds, i.FILL will credit Retailer with the difference between [***]
received and [***] of Retailer's annual net Product sales. If, in any given
year, Retailer does not meet its Volume Goal or does not adhere to all
[***], i.FILL will guarantee only the IMD funds that have been procured to
date for that year. IMD Funds shall be paid on a quarterly basis.
7. PRODUCT PRICING. Except as otherwise set forth in this Agreement, for the
term of this Agreement, i.FILL will sell Product to Retailer [***], as
---
described in [***] attached hereto as Exhibit C, provided, however, that
---
Retailer meets the minimum annual Volume Goals during the term of the
agreement as set forth below:
Time Period Annual Net Product Sales Volume Goal
----------- ------------------------------------
[***] [***]
--- ---
[***] [***]
--- ---
If at the end of any given year defined above, Retailer has not met the
minimum Volume Goal, Retailer will be debited the equivalent of [***]
---
percent ([***]) of its gross Product sales of that year.
---
7.1 Average Cost. For purposes of this Agreement, "Average Cost" means the
------------
average price paid by Valley for each Product by Stock Keeping Unit
("SKU"). Average Cost is calculated as follows: as Product is
purchased by Valley, the costing system recalculates, at the time of
receipt processing, the average price for each SKU in Valley's
inventory. This costing system incorporates full case pack purchases
(i.e., "Box Lots") as well as purchases in less than Box Lot
quantities (i.e., "Loose Piece" purchases), each by SKU. The Average
Cost calculation includes Box Lot incentives, new release discounts,
ongoing and periodic catalog discounts, and one-time discounts. The
Average Cost calculation does not include cash discounts for timely
payment by Valley,
______________________
*Confidential treatment is requested for confidential information enclosed
in brackets and underlined.
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
<PAGE>
return incentives, advertising incentives or volume rebates. In
addition, specially negotiated prices on purchases from secondary,
nontraditional sources (e.g., inventory purchased in connection with
corporate acquisitions, outsourcing contract, and liquidation), shall
not be included in the Average Cost calculation.
7.2 [***]. The Cost Plus Pricing for CD singles and cassette singles, (as
---
described in the audiofile documentation provided to Retailer from
time to time and referred to in section 16.3 below) will be [***]. A
---
copy of the current audiofile user documentation is attached hereto as
Exhibit D.
7.3 [***]. Retailer acknowledges that the price charged by i.FILL to its
---
customers for Product sold to such customers ("Product Pricing")
reflects the cost of Product to i.FILL, as well as the customer's
order volume, payment terms, fulfillment costs, exclusivity
requirements, the term of agreement with the customer, product mix
purchased by the customer, and the service standards offered to the
customer.
7.3.1 The Product Pricing offered to Retailer by i.FILL shall be
[***], meaning that the Product Pricing offered to Retailer
---
shall be [***] to [***] when taking into account all the
--- ---
factors set forth above, provided that [***]. The term [***]
--- ---
refers to i.FILL's direct-to-consumer customers who receive
Cost Plus Pricing.
7.3.2 In the event that i.FILL or Valley offers [***] to any other
---
similarly situated direct-to-consumer customer, Retailer shall
immediately be entitled to [***] provided that Retailer also
---
agrees to accept any other terms and conditions imposed upon
[***] including, without limitation, sales volume requirements,
---
payment terms, fulfillment fees, term of the agreement, product
categories purchased, and level of service offered [***].
---
8. CUSTOM INVOICE. i.FILL will create a custom invoice with Retailer's logo,
product return and customer service information printed on same. The usual
[***] one-time charge will be waived by i.FILL.
---
9. ORDER PLACEMENT. Retailer will collect orders and send such orders to i.FILL
via EDI.
9.1 Pre-orders. Retailer shall collect pre-orders until four days prior to
----------
the date that a new release title is first to be made available to
consumers (the "street date"), at which point such pre-orders will be
forwarded in a separate batch to i.FILL on the date and time of day
required by i.FILL. i.FILL shall ship all pre-orders no later than
street date minus one day, provided i.FILL has received the new release
title(s) from the label/distributor of such new release(s) in time for
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
3
<PAGE>
processing. If a street date is delayed, Retailer will be responsible
for holding the pre-orders until four (4) days before the new street
date.
9.2 Back Orders. i.FILL shall ship the in-stock items of an order as set
-----------
forth in this Agreement and, except as set forth in this section, will
cancel the out of stock items. Retailer may elect to have i.FILL hold
an order that has one or more items out of stock until it is
completely fulfilled by typing a "Y" in the "ship complete" field of
the EDI inbound specifications. Retailer will inform i.FILL of the
number of days, up to a maximum of 25 days (the "hold Period"), that
i.FILL is to hold the "ship complete" orders before shipping the
available products and canceling the out of stock products. In the
event that all products included in an order are out of stock, i.FILL
will hold the order for the Hold Period before canceling the order
(subject to prior cancellation of such order by Retailer).
10. ORDER FULFILLMENT. The following sets forth i.FILL's fulfillment practices:
10.1 Priority. Priority orders are defined as orders shipped domestically
--------
for overnight or second-day air freight delivery. Priority orders
received on any business day by [***] will be shipped on the same day.
---
Orders received after [***] will be shipped the following business
---
day.
10.2 Standard. Standard orders are defined as all orders shipped
--------
domestically or internationally for other than overnight or second-day
air freight delivery. On any business day that i.FILL receives
Standard orders by [***], it will ship the orders the following
---
business day. Standard orders received after [***] will be deemed
---
received the next business day and i.FILL will ship these orders the
business day after the day they are deemed to be received.
10.3 Peak Periods. The first day of a business week and any day on which
------------
order volume is greater than [***] above average (calculated on a
---
floating 30-day basis) is defined as a Peak Period. i.FILL shall use
best efforts to adhere to the fulfillment policies set forth above
during Peak Periods, but its failure to so adhere during Peak Periods
shall not be considered a default under this Agreement.
11. FULFILLMENT FEES. Unless otherwise provided in this Agreement, Retailer
agrees to pay i.FILL the following fees for each order fulfilled by i.
FILL.
11.1 Packing and Handling Fees i.FILL will pick, pack and prepare Product
-------------------------
for shipment to Retailer's customers for a fee of [***] per first unit
---
in a given order and [***] per subsequent unit in that same order.
---
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
4
<PAGE>
11.2 Surcharges Retailer agrees to pay to i.FILL the following surcharges
----------
as applicable:
11.2.1 International Shipment Surcharge. Surcharge of [***] per order
-------------------------------- ---
shipped internationally via integrated carrier.
11.2.2 USPS Priority Mail Insured Surcharge. Surcharge of [***] per
------------------------------------ ---
order shipped USPS Priority Mail Insured.
11.2.3 Manual Processing Surcharge. In the event i.FILL receives an
---------------------------
order by any other means EDI transmission (i.e., by mail,
facsimile, etc.) a surcharge of [***] per order shall be
---
assessed.
12. SHIPPING
12.1 Risk of Loss. All shipments under this Agreement shall be F.O.B.
------------
Valley's shipping facility. Title and risk of loss wit respect to all
orders and products shipped by i.FILL or Valley under this Agreement
shall pass to Retailer or its customers upon delivery of the products
to the carrier at the point of shipment. In the event of shipping
damage or orders lost in shipment, i.FILL will assist in filing a
claim on behalf of Retailer and will credit Retailer any amounts
received or credits to i.FILL in connection with each claim.
12.2 Choice of Carrier i.FILL will ship the order with the carrier
-----------------
requested by Retailer or its customer. i.FILL will cancel any order
with the carrier requested by Retailer or its customer. i.FILL will
cancel any order for which the delivery address is not serviced by the
indicated carrier, and will promptly notify Retailer of the same.
Retailer shall have the option to retransmit the order to be shipped
via an alternate i.FILL supported carrier.
12.3 Shipping Costs. i.FILL will invoice Retailer's customers at such rates
--------------
as are requested by Retailer. Retailer will pay i.FILL shipping costs
per the shipping tables attached hereto as Exhibit E (as mentioned
from time to time by i.FILL). i.FILL will provide Retailer written
notice of shipping rate changes and the effective date of such
changes. i.FILL represents that the shipping costs charged to Retailer
are its actual shipping costs (not considering rebates).
13. PRODUCT RETURNS
13.1 Definitions.
-----------
13.1.1 Rejected Returns: Any of the following: accessories; blank
----------------
tape; counterfeit Product; imports; promos; limited editions;
Product identified in audofile as non-returnable; Product sold
by a record club; Product sold
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
5
<PAGE>
on an one-way basis; Product with a last customer return date
(as defined in the audiofile license agreement) prior to the
date the returned product is received by i.FILL; Product
without the original artwork or liner notes; Schwann Guides;
shopworn Product (items that have damage to the artwork, have
foreign substance on the media or have been defaced); and vinyl
Product.
13.1.2 Breached Product. Any Opened CDs from the following companies:
----------------
Intersound; Polygram Distribution ("PGD"); RYKO; Sony Music
Entertainment ("Sony"); Universal ("UNI"); and Warner, Electra
and Atlantic ("WEA"). Any Opened PGD cassettes are considered
Breached.
13.1.3 Opened Product: Any Product with the top spine label or
--------------
original manufacturer's shrink wrap or "dog bone" holographic
sticker removed or cut in any way.
13.1.4 Defective Product: Any Opened Product that is identified as
-----------------
defective when returned and which is actually defective.
13.1.5 Accepted Returns. Any Product which is neither Rejected Return
----------------
nor Breached Product.
13.2 Return Policy. Accepted Returns are returnable and eligible for return
-------------
credit to Retailer. Rejected Returns and Breached Product are non-
returnable and not eligible for return credit to Retailer.
13.3 Return Fees. In the event i.FILL receives Rejected Returns or Breached
-----------
Product from Retailer or its customers, the Product will be returned
to Retailer at [***] per unit processing charge will be imposed.
---
Retailer may elect to have i.FILL keep the Product to avoid the [***]
---
per unit processing charge.
13.4 Refurbishing Fees. Retailer will pay a [***] per unit refurbishing fee
----------------- ---
on all Accepted Opened Product except for Defective Product.
13.5 Restocking Fees. Retailer will pay a [***] Restocking Fee for
--------------- ---
processing all Accepted Returns except for Defective Product and
Unopened Product returned as incorrect items.
13.6 Reshipping. i.FILL will accept and reship orders returned by
----------
Retailer's customers at no Restocking or additional Fulfillment Charge
if the returned Product falls into any of the following categories:
(1) Unopened items returned as incorrect items shipped (items included
in the package that were not listed on the
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
6
<PAGE>
invoice); (2) items listed on the invoice as fulfilled, but reported as
missing by the consumer; and (3) correct items returned as Defective, but
not Breached.
13.7 Return Processing Information. Return processing information will be
-----------------------------
posted daily to i.FILL's Bulletin Board System or FTP server.
13.8 Modifications. i.FILL reserves the right to modify its return policies
-------------
from time to time. Such modifications shall be effective upon Receipt by
Retailer of written notice thereof.
14. OPTIONAL SERVICES
14.1 Paper Inserts Retailer will pay a fee of [***] per Paper Insert
------------- ---
packed by i.FILL at the request of Retailer in product shipped under
this Agreement. Retailer shall supply the Paper Inserts at no cost
to i.FILL. For purposes of this paragraph, Paper Inserts are defined
as lightweight, paper-based, promotional items the same size or
smaller than a standard single CD, or pre-folded to such size.
14.2 Merchandise Inserts. At Retailer's request, i.FILL will pack
-------------------
Merchandise Inserts (promotional inserts other than the Paper
Inserts described in paragraph 14.1) in its orders at a cost to be
negotiated by the parties. Retailer shall supply Merchandise Inserts
at no cost to i.FILL.
14.3 Exclusive Merchandise. Upon request by Retailer, i.FILL will
---------------------
receive, warehouse and ship Exclusive Merchandise sold through
Retailer for a fee to be negotiated after a sample has been received
and reviewed for packing and shipping requirements. For merchandise
that is standard product (single CDs or cassettes and single VHS) a
management fee of [***] per unit will be applied.
---
14.4 Insert Bar Codes. A unique UPC bar-code is required for each Paper
----------------
or Merchandise Insert. Retailer should purchase and apply a
proprietary bar-code on all inserts. At Retailers request or if the
bar-code does not meet Valley's standards, i.FILL will create and
apply a bar-code for a fee of [***] per applied bar-code.
---
14.5 Custom Price Stickers. At Retailers request, i.FILL will apply
---------------------
customer price stickers for a fee of [***] per applied sticker.
---
15. BILLING AND PAYMENT Pending i.FILL's review and approval of Retailers
credit application, i.FILL will extend credit to Retailer under the
following terms and conditions:
___________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
Buy.com____
i.FILL____
7
<PAGE>
15.1 Invoices and Account Reconciliation. i.FILL will provide Retailer with
-----------------------------------
an account reconciliation on a monthly basis. Invoices are due and
payable thirty (30) days after the invoice date.
15.2 Past Due Amounts. [***]Furthermore, all overdue balances not paid
---------------- ---
within [***] after the invoice date, will be assessed interest at the
---
lesser of [***] or the maximum interest rate allowable by law,
---
beginning on the due date. i.FILL, in its sole discretion, may refer
collection of any past due amount to any agency or attorney, and
Retailer will be liable for the payment of all costs and expenses,
including reasonable attorney's fees, associated therewith.
16. PROPRIETARY RIGHTS.
16.1 Confidential Information. The term "Confidential Information" refers
------------------------
to this Agreement and the subject matter of this Agreement and to all
information which one party furnishes or makes available to the other
party and all information related to one party's business which the
other party and all information related to one party's business which
the other party acquires in the course of performing its obligations
under this Agreement. Disclosure of Confidential Information by a
party is forbidden except in the following circumstances: (i) to
employees and outside parties, but only to the extent necessary to
fulfill its obligations under the Agreement; (ii) if the Information
disclosed is already publicly known through no fault of the disclosing
party; (iii) if the information is required to be disclosed by law or
legal process, provided that the party, from whom disclosure is
promptly required, gives the other party notice and agrees to
cooperate with the non-disclosing party as that party may reasonably
request to oppose disclosure; and (iv) in connection with a party's
initial public offering; provided, however, that the disclosing party
shall take reasonable measures to keep Confidential Information
confidential, including requesting confidential treatment of this
Agreement by any governmental authority and/or any other person or
third party reviewing the Agreement in connection with the public
offering. Under no circumstances may Retailer disclose Confidential
Information including, but not limited to, any information obtained
during Retailer's i.FILL site visit, to any of Retailer's outside
directors; provided, however, that Retailer may disclose general
financial information (i.e., sales of Product) to its outside
directors to the extent required by law. i.FILL (including its
principals or affiliates) agrees not to use Retailer's customers' data
for any commercial or improper purposes.
16.2 Transaction Information. Both parties shall use best efforts to ensure
-----------------------
maximum security of transaction information maintained on each party's
computer system including, but not limited to, the names, addresses
and products ordered by Retailer's customers.
16.3 audiofile Database. User documentation for the audiofile database is
------------------
attached hereto as Exhibit D. The rights to intellectual property
related to the audiofile database are governed by the audiofile
License, attached hereto as
Buy.com____
i.FILL____
8
<PAGE>
Exhibit A. Any termination of this Agreement will automatically
terminate the audiofile License, and any termination of the audiofile
License will automatically terminate this Agreement.
16.4 audiotrax Database. User documentation for the audiotrax database is
------------------
attached hereto as Exhibit F. The rights to intellectual property
related to the audiotrax database are governed by the audiotrax
License, attached hereto as Exhibit B. Any termination of this
Agreement will automatically terminate the audiotrax License, and any
termination of the audiotrax License will automatically terminate this
Agreement.
16.5 No Rights to Marks. Each party is hereby granted no rights in or to
------------------
the other party's Marks. "Marks" means the trademarks, service marks,
trade names or other marks, registered or otherwise, used by either
i.FILL or Retailer, as applicable.
17. TERM
17.1 Term. The term of this Agreement begins on the date of this Agreement
----
and ends two (2) years thereafter (the "Initial Term"). Unless and
until i.FILL provides at least six (6) month's prior written notice of
its intention not to extend the term of this Agreement or Retailer
provides at least ninety (90) days prior written notice of its
intention not to extend the term of this Agreement, this Agreement
shall automatically renew for additional one (1) year terms (each a
"Renewal Term", the Initial Term and all Renewal Terms to be
collectively referred to as the "Term")
17.2 Early Termination. Either party may terminate this Agreement upon
-----------------
thirty (30) days' written notice under the following conditions:
17.2.1 Either party may terminate this Agreement, absent a material
breach, if i.FILL discontinues fulfillment services to on-
line customers or Retailer discontinues the on-line sale of
Product.
17.2.2 i.FILL or Retailer delivers to the other party a 30-day
written notice of termination for a material breach of this
Agreement, and the other party fails to cure such a breach
within thirty (30) days.
18. LIMITATION OF REMEDIES AND EXCLUSION OF WARRANTIES. IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT OR CONSEQUENTIAL DAMAGES,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES AND REGARDLESS OF THE FORM OF ACTION. ALL PRODUCT SOLD HEREUNDER IS
SOLD "AS-IS" AND i.FILL EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED
WARRANTIES WITH RESPECT TO PRODUCT SOLD UNDER THIS AGREEMENT, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR PURPOSE.
Buy.com____
i.FILL____
9
<PAGE>
19. REPRESENTATIONS AND WARRANTIES.
19.1 i.FILL's Representations and Warranties.
---------------------------------------
19.1.1 i.FILL has the right and authority to enter into this
Agreement.
19.1.2 The Products delivered by i.FILL to Retailer's customers in
substantially the same condition as they were in when they
were received by Valley in Valley's distribution facility.
19.2 Retailers Representations and Warranties.
----------------------------------------
19.2.1 Retailer has the right and authority to enter into this
Agreement
19.2.2 Retailer will not include any content on its website that
infringes on the intellectual property rights, including
copyright and trademark rights, of any third party.
19.2.3 Retailer will abide by its terms of service and privacy
policies.
20. INDEMNIFICATION. Both parties will, at all times, indemnify and hold the
other party harmless from any third and all third-party claims, damages,
liabilities, costs and expenses (including reasonable attorney's fees)
arising out of any breach or alleged breach by such party of any warranty
or representation made by such party in this Agreement. Both parties will
further indemnify and hold the other party harmless for any and all third-
party claims, damages, liabilities, costs and expenses (including
reasonable attorney's fees) arising out of (i) any infringement or alleged
infringement of intellectual property belonging to a third-party; or (ii)
any violation of any applicable Federal or State law, rule, regulation, or
ordinance.
21. FORCE MAJEURE. Neither party will be liable for failure to perform, or the
delay in performance of, any of its obligations under this Agreement if,
and to the extent, that such failure or delay is caused by events
substantially beyond its control, including, but not limited to, acts of
God, acts of the public enemy or governmental body in its sovereign or
contractual capacity, war, fire, floods, strikes, epidemics, quarantine
restrictions, civil unrest or riots, freight embargoes and/or unusually
severe weather. Lack of funds by either party shall not excuse timely
performance. The party so affected shall use commercially reasonable
efforts to avoid or remove such causes of non-performance or delay, and
shall continue performance hereunder with reasonable dispatch whenever such
causes are removed. If any such non-performance or delay continues for more
than sixty (60) days, the unaffected party may elect to terminate this
Agreement without liability or any liquidated or other damages upon written
notice to the other party.
22. GENERAL.
22.1 Notice. All notices, including those related to product pricing,
------
ordering and fulfillment policies that will have a material impact on
the other party's
Buy.com____
i.FILL____
10
<PAGE>
business, shall be in writing and delivered by certified mail, postage
prepaid and return receipt requested, or transmitted either by
facsimile or electronic mail if confirmed contemporaneously by such
mailing, to the addresses provided in writing, from time to time by
the parties.
22.2 Entire Agreement; Amendments. This Agreement constitutes the entire
----------------------------
agreement of the parties concerning the subject matter hereof,
superseding all prior proposals, negotiations and agreements
concerning the subject matter of this Agreement. No representation or
promise relating to and no amendment of this Agreement will be binding
unless it is in writing and signed by authorized representatives of
both parties.
22.3 Assignment. This Agreement may not be assigned by either party without
----------
first obtaining the other party's written consent, which shall not be
unreasonably withheld. Subject to the foregoing, this Agreement will
be binding upon and inure to the benefit of successors and permitted
assigns of the parties hereto.
22.4 Captions; Waiver; Severability. The captions appearing n this
------------------------------
Agreement are inserted only as a matter of convenience and in no way
define, limit, construe o describe the scope or interpretation of this
Agreement. No waiver by a party of any breach of any provision of this
Agreement will constitute a waiver of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid,
void or unenforceable, the remaining provisions hereof shall in no way
be affected or impaired, and such remaining provisions shall remain in
full force and effect.
22.5 Governing Law and Arbitration. This Agreement shall be construed and
-----------------------------
enforced pursuant to the laws of the State of California. If the
parties are unable to settle any disagreements regarding this
Agreement or the project contemplated by this Agreement, such
disagreements shall be submitted to binding arbitration within the
State of California under the rules of the American Arbitration
Association as then in effect.
22.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which will be considered one and the same
agreement, and will become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other
party. Facsimile signatures shall be considered original in all
respects.
In witness whereof, the parties hereto have executed this Agreement effective as
of the date first above written.
i.FILL, a division of BUY.COM
VALLEY MEDIA, INC.
By: _____________________________ By: ______________________________
Its: _____________________________ Its: ______________________________
Buy.com____
i.FILL____
11
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT A audiofile License
EXHIBIT B audiotrax License
EXHIBIT C Average Cost Movement Worksheet
EXHIBIT D audiofile User Documentation
EXHIBIT E Shipping Tables
EXHIBIT F audiotrax User Documentation
Buy.com____
i.FILL____
12
<PAGE>
EXHIBIT 10.5
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
NASHVILLE COMPUTER LIQUIDATORS L.P.
121 16th Avenue, North
Nashville, Tennessee 37203
Telephone: (615) 329-0090
Fax: (615) 329-0190
April 19, 1999
BUY COM, INC.
21 Brookline
Aliso Viejo, CA 92656
Attn: Brent Rusick
Re: Merchandising and Supply Agreement
Ladles and Gentlemen:
The following is the merchandising and supply agreement (the "Agreement")
between BUY.COM, INC. ("BC") and Nashville Computer Liquidators L. P. ("NCL").
1. Products:
NCL will merchandise and supply Products (defined below) to BC, on the
terms and conditions of this Agreement. The term "Products" in this
Agreement refers to "refurbished," "open box" and "end of life" computer
hardware, electronics, and exceptional value household products, "clone,"
or "white box" computer hardware products and similar merchandise. BC
acknowledges its understanding that NCL is in the liquidation business with
respect to the Products. NCL is not the manufacturer of the Products. WITH
THE EXCEPTION OF POSSIBLE WARRANTIES FROM MANUFACTURERS OF THE PRODUCTS
(WHICH MAY OR MAY NOT BE AVAILABLE), NCL IS FURNISHING THE PRODUCTS TO BC
AND ITS CUSTOMERS "AS IS," WITHOUT ANY WARRANTY BY NCL WHATSOEVER,
INCLUDING WITHOUT LIMITATION ANY WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE OR ANY WARRANTY OF MERCHANTABILITY. NCL will provide all
manufacturer's warranty information to the extent available.
2. Marketing of Products:
At any one time, NCL will offer BC a limited amount of stock keeping units
("SKUs") of Products selected by NCL based on consultations with BC. The
Products will be described on pre-built HTML pages developed by BC on the
BC web site presently expected to be named BUYSPECIALS.COM (the "Site").
The Site may have another name selected by BC. Those HTML pages are to
include technical specifications and pictures of the Products (each to be
provided by NCL), together with Pricing and other information BC determines
to be in its best interest.
<PAGE>
3. Merchandising Procedures:
NCL will notify BC electronically or on paper as each [***] from NCL's
---
liquidation sources (the "Availability Notice"). The Availability Notice
will include [***]. NCL makes no representation or warranty as to suggested
---
sales prices by BC, such sales prices being totally within the discretion
of BC based upon all of its market information, including information
furnished by NCL as part of the Availability Notice. [***], BC will notify
---
NCL [***] if any, it intends to place on the Site and, of the [***]
--- ---
available, the [***] to treat as [***] to this Agreement. With the [***],
--- --- ---
BC will be deemed to have accepted the price to BC set [***], and those
---
SKUs will be subject to the terms and conditions of this Agreement.
4. Fulfillment Services:
NCL will be responsible, directly or through Ingram Entertainment Inc.
("IEI') or one or more other contractors, for fulfilling on behalf of BC
orders for the Products from BC Internet consumer customers who visit the
Site. These services are comprised of packing and shipping those orders
direct to the Internet consumer in accordance with Exhibit A to this
Agreement (collectively the "Fulfillment Services").
5. Exclusivity and Referral:
During the term of this Agreement, NCL will [***] the Products and the
---
Fulfillment Services [***] and BC will [***] to its Internet consumer
--- ---
customers the Products utilizing fulfillment or other services of a party
[***]. In the event BC does not provide the Acceptance Notice, or in the
---
event BC removes an SKU from the Site for any reason or is required to
remove an SKU from (or not place an SKU on) the Site pursuant to notice
from NCL pursuant to this Agreement, NCL may offer and sell that SKU and
may directly or indirectly provide related fulfillment services [***] to
---
BC. Nothing in this Agreement shall prohibit NCL [***] (i.e., units not
---
included in the Acceptance Notice) [***] at any time, provided NCL does not
---
[***]. During the term of this Agreement, in the event BC is offered the
---
Products from any vendor or potential vendor, other than Products of a
manufacturer to be obtained directly from the manufacturer or to be
obtained from Ingram Micro, BC will refer that inquiry to NCL as its
exclusive supplier and provider of fulfillment services and will not
purchase or sell such merchandise other than through NCL pursuant to this
Agreement.
6. SKU Removal from Site:
NCL shall have the right in its sole discretion to request, electronically
or on paper, upon no less than 24 hours prior written notice, that BC
remove a particular SKU from the Site (or, if the particular SKU is not on
the Site, that BC not place the SKU on the Site). Upon receipt of that
request, BC shall be required to remove the SKU from the Site on or before
the time specified in the request (or, if the SKU is not on the Site, BC
shall not place it on the Site). Circumstances in which NCL would make such
a request would include failure to place the SKU on the Site promptly
following selection by BC, significant sales slowdowns or shortfalls of the
SKU from the Site, or anticipated price reductions for the SKU in the
liquidation or other market.
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
7. Returns:
Due to the liquidation/close-out nature of the Products, BC and NCL have
agreed to the return rights set out in this paragraph. The Site will notify
BC customers that Products may only be returned if materially inoperable
upon receipt (i.e. "dead on arrival"). BC customers are to receive a return
authorization from BC prior to return of any of the Products. After receipt
of the return authorization, BC will direct the customer to return the item
directly to NCL's Fulfillment Services contractor (or, if no such
contractor, to NCL), provided that, in order for BC to receive credit for
the return, the item must be received by the contractor (or NCL) within 14
days of the date the defective item was received by the customer (with all
Products sent by U.S. mail deemed received by the customer within four mail
delivery days of deposit in the mail). In order for BC to receive credit
for the returned item, the contractor (or NCL) must receive the item within
the above 14 day period, together with (from BC) the BC return
authorization and the related order information. The contractor (or NCL)
shall, each NCL business day, furnish BC a report of all returns received
since the last such business day.
8. Special Handling:
For special handling (i.e., inserts), NCL and BC shall agree in advance on
the pricing to BC.
9. Terms:
Payment terms will be net 14 days from shipment date for all Products
shipped by NCL to BC customers pursuant to the Fulfillment Services, plus
related freight charges, with a seven day grace period. On the first
business day of each week, NCL will furnish BC with a report of all
Products shipped and related freight and other charges during the preceding
week. On or before Friday of the week following the week in which NCL
issues that report, BC will pay NCL, by wire transfer, the amount indicated
on that report. The report will be delivered electronically or on paper as
mutually agreed by NCL and BC. Absent mutual agreement, the report shall be
issued on paper by facsimile transmission with a hard copy to follow by
recognized overnight courier.
BC understands that its credit line with NCL will be as established or
modified from time-to-time based upon NCL's credit review and credit
policies. Any amounts not paid when due will be subject to a late charge of
[***] on the overdue balance (or, if less, the maximum amount permitted by
---
applicable law). Payments received from BC will be credited first to unpaid
interest as set out above.
10. Advertising:
BC will not [***] of any kind in connection with this Agreement or the
---
transactions contemplated by it. BC and NCL will agree in advance [***] to
---
be received by NCL in the event [***].
---
11. Freight:
The Products will be warehoused in Memphis, Tennessee, or such other
location as NCL
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
deems advisable. The price to be paid NCL by BC for the Products shall
include shipping into such warehouse by the supplier to NCL. For shipments
by NCL to the BC customers as part of the Fulfillment Services, [***] at
---
the same time and on the same basis as [***] pursuant to the terms of this
---
Agreement.
12. Term of Agreement:
The term of this Agreement will commence on the date hereof and terminate
on the day preceding the second anniversary of that date. If not terminated
sooner in accordance with its terms, this Agreement shall automatically
renew for successive one year terms, subject to the right of either party
to terminate the Agreement during any renewal term on not less than 30 days
prior written notice to the other. Notwithstanding the foregoing, NCL may
terminate this Agreement immediately in the event BC becomes more than 15
days past due or otherwise violates its credit terms with NCL.
13. Assignment:
Neither BC nor NCL may assign this Agreement without the express written
consent of the other.
14. Confidentiality:
BC and NCL agree to keep the terms and conditions of this Agreement
strictly confidential during the term of this Agreement and for the three
year period following its termination. BC and NCL agree not to disclose
those terms and conditions in whole or in part to any party other than
disclosure on a "need to know" basis to their respective employees,
contractors, advisors, or affiliates whose duties reasonably justify the
need for such knowledge. The following information shall be exempt from the
provisions of this paragraph: (a) information required by law to be
disclosed; and (b) information in the public domain through no act of BC or
NCL.
15. Limitation of Damages:
NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER HEREUNDER FOR SPECIAL
OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, DUE TO THE BREACH OR AN
INTENDED BREACH OF THIS AGREEMENT, EVEN IF THE BREACHING PARTY HAS BEEN
ADVISED THAT SUCH DAMAGES MAY RESULT FROM A BREACH.
16. Tax Indemnification:
BC is the seller of the Products to its customers and shall be responsible
for any and all sales and similar taxes arising from such sales. BC SHALL
FOREVER DEFEND, INDEMNIFY, AND HOLD HARMLESS NCL AND ITS PARTNERS, AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AFFILIATES, FROM ANY
AND ALL SALES AND SIMILAR TAX LIABILITY ARISING FROM THE SALE OF PRODUCTS
TO BC CUSTOMERS, INCLUDING INTEREST, PENALTIES, AND RELATED CHARGES, EXCEPT
TO THE EXTENT SUCH TAX IS NOT A SALES OR SIMILAR TAX FOR WHICH NCL IS
LIABLE BY
______________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
OPERATION OF LAW OR EXCEPT TO THE EXTENT LEVIED ON THE INCOME NCL DERIVES
FROM THOSE SALES.
17. Ingram Entertainment Inc.:
BC acknowledges that IEI is an owner of NCL. BC acknowledges, for the
benefit of IEI and NCL, that this Agreement does not in any way affect or
limit the rights of IEI and, indirectly, NCL, under the Non-Competition
Agreement among SPEEDSERVE.COM INC., BUY CORP., IEI, and David B. Ingram,
dated as of December 3, 1998. NCL may furnish some or all of the Products
or the Fulfillment Services, through IEI as agent or as consignee of NCL,
or as both agent and consignee. BC will make all payments to IEI as agent
of NCL until the later of the date BC has the systems capability to treat
NCL as a separate vendor and the date BC is notified by NCL to make
payments directly to NCL. During the time BC is to make payment to IEI as
agent of NCL, all shipments containing both the Products and items supplied
by IEI to BC pursuant to the supply agreement between them will be subject
to the terms of this Agreement, i.e., payment will be made pursuant to item
----
9 above. Any amounts due and owing between NCL and BC shall be separate
from and not subject to offset against any amounts due and owing between
IEI and BC.
18. Notices:
Notices under this Agreement shall, except as otherwise specifically
provided in this Agreement, be sent to NCL at the letterhead address first
appearing above, Attn: President, with a copy to Ingram Entertainment Inc.,
Two Ingram Blvd , La Vergne, Tennessee 37089, Attn: General Counsel , and
to BC at the address first set out above, Attn: Brent Rusick, with a copy
to the attention of General Counsel at the same address, Notices shall be
deemed received when delivered or, if mailed, five days after the date of
mailing, properly addressed with proper postage.
19. Miscellaneous:
The headings of this Agreement are included for purposes of convenience
only, and do not affect the construction or interpretation of any of its
provisions. This Agreement constitutes the entire agreement between the
parties pertaining to its subject matter. Any modification of this
Agreement must be in writing signed by the parties. This Agreement shall be
binding on, and shall benefit, the parties and their respective successors
and assigns. This Agreement shall be governed by and construed in
accordance with Tennessee law. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
If the terms and conditions set out in this Agreement are accepted and agreed to
by BC, please execute and return to me the attached Counterpart of this letter
to indicate that acceptance and
<PAGE>
agreement, and keep the other counterpart in your files. We took forward to a
mutually prosperous relationship.
Sincerely,
NASHVILLE COMPUTER LIQUIDATORS L.P
By: ________________________________
Peter Marcum, President
ACCEPTED AND AGREED THIS
_____ DAY OF APRIL. 1999.
BUY.COM, INC.
By: _____________________________
Print Name: Brent Rusick
----------------------
Title: VP Sales & Operations
--------------------------
<PAGE>
Exhibit A
---------
Fulfillment Services
1. Order Transmission. BC and NCL will agree on a means for electronic
------------------
transmission to NCL of orders from BC customers visiting the Site. Orders
will be transmitted to NCL or its contractor not more than lour hours after
their receipt by BC. Orders may be transmitted in batches, subject to the
preceding four hour interval. BC and NCL, will agree on order content.
Orders will be complete and NCL will have no obligation for any order
containing incomplete Information.
2. Processing. Orders received by Noon (Central Time) on an NCL business day
----------
will be processed and shipped by NCL that same business day. Orders
received after that time will be processed the next NCL business day.
3. Safety Stock Units and Lack of Availability. The Acceptance Notice shall
-------------------------------------------
specify the number of "Safety Stock Units" of each SKU. When the number of
units of that SKU on hand and designated for BC is less than the number of
Safety Stock Units, NCL or its contractor will use reasonable efforts to
notify BC. BC will then have sole responsibility for notifying visitors to
the Site either that the SKU is no longer available or that quantities and
availability are extremely limited. Further, if any Product is not
available for any reason, NCL will notify BC electronically no later than
the NCL business day following receipt of the order. Due to the close out
or liquidation nature of the Products, NCL cannot and will not be
responsible for lack of availability or backorders.
4. Reports. Each NCL business day, NCL will furnish a report to BC
-------
electronically indicating orders shipped, orders rejected due to incomplete
information, and orders rejected due to unavailable Product.
5. Service. NCL will render all services in a commercially reasonable,
--------
professional manner, but will have no liability to BC except to the extent
due to NCL's gross negligence or willful misconduct.
6. Title to Products. Title to the Products shall remain with NCL until
-----------------
delivered to the common carrier addressed to the BC customer according to
the order, at which time it shall pass to BC until delivered to the BC
customer.
<PAGE>
EXHIBIT 10.6
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SOFTBANK
MASTER SERVICE AGREEMENT
================================================================================
CONFIDENTIAL
================================================================================
This Master Service Agreement is made this 1st day of October, 1998, between
BuyComp, L.L.C., a California Corporation, with offices located at 21 Brookline,
Aliso Viejo, California 92656 (hereinafter referred to as "CLIENT") and Upgrade
Corporation of America d/b/a SOFTBANK Services Group, a Delaware Corporation,
with offices located at 699 Hertel Avenue, Buffalo, New York 14207-2398
(hereinafter referred to as "SOFTBANK").
Recitals
WHEREAS, CLIENT has developed and owns or acquired all rights to a list of
the registered or prospective users of its products; and
WHEREAS, CLIENT intends to market and sell its product or services to its
registered or prospective user base; and supporting such a user base; and
WHEREAS, SOFTBANK has certain experience and capabilities in handling the
tasks involved in selling to and supporting such a user base; and
WHEREAS, CLIENT wishes to obtain the benefit of such experience and
capabilities by utilizing certain services of SOFTBANK in CLIENT's marketing
effort to sell it product or services; and
WHEREAS, SOFTBANK agrees to supply CLIENT with the services of its staff to
perform the services described in this Agreement and CLIENT agrees to use such
services of SOFTBANK's staff for such purposes;
NOW, THEREFORE, in consideration of the covenants derived hereunder the
parties agree as follows:
1. SOFTBANK Scope of Services
--------------------------
SOFTBANK agrees to use its best efforts to provide one or more of the
following services, as mutually agreed upon and further set forth in the Service
Fee & Responsibilities Attachment and detailed Specifications Form prepared by
SOFTBANK at the direction of CLIENT.
2. SOFTBANK Responsibilities
-------------------------
SOFTBANK will provide to CLIENT its services in a good and workmanlike
manner and as set forth in the Service Fee & Responsibilities Attachment.
3. CLIENT Responsibilities
-----------------------
In order for SOFTBANK to fulfill its obligations under this Agreement, it
is necessary that CLIENT fully cooperate and assist SOFTBANK in SOFTBANK's
performance of its obligations under this Agreement. Therefore, CLIENT agrees
to perform in a timely fashion as applicable, its responsibilities set forth in
the Service Fee & Responsibilities Attachment.
In the event CLIENT fails to perform its Client Responsibilities in a
timely manner and such failure causes SOFTBANK to incur additional cost, CLIENT
shall reimburse SOFTBANK for such additional costs, provided they are reasonable
and documented by SOFTBANK and provided there has been notice by SOFTBANK of a
failure that will cause such costs to incurred.
4. Dedicated Representatives
-------------------------
SOFTBANK shall appoint one qualified staff member ("SOFTBANK Account
Service Representative"), who will (i) have authority to act for SOFTBANK and to
make binding decisions with respect to this Agreement, unless otherwise limited
herein; (ii) submit material and information requests to CLIENT; (iii) provide
access to SOFTBANK's staff to answer questions; and (iv) provide schedules and
plans to CLIENT for CLIENT's review and/or approval.
CONFIDENTIAL & PROPRIETARY
<PAGE>
CLIENT shall appoint one qualified staff member ("CLIENT Account Service
Representative"), who will (i) have authority to act for CLIENT and to make
binding decisions with respect to this Agreement; (ii) to execute any Addendums,
Attachments or documents incorporated as a part of this Agreement on behalf of
CLIENT; (iii) review promptly information supplied by SOFTBANK; (iv) provided
and assume responsibilities for accuracy of CLIENT's information and data
required by this Agreement; and (v) provide access to CLIENT staff to answer
questions, and provide training to SOFTBANK.
5. CLIENT Product/Literature
-------------------------
(This section intentionally removed.)
6. Confidentiality
---------------
Both parties acknowledge that each party will be disclosing to the other
confidential and proprietary information relating to their past, present and
future activities, products services, customer lists, customer profiles,
business plans, business practices and other information designated as
confidential ("Confidential Information"). The Confidential Information may be
disclosed orally or in writing, and all information, unless otherwise indicated,
shall be deemed to be confidential and proprietary. Confidential Information,
however, does not include information that: (i) is now or subsequently becomes
generally available to the public through no fault or breach on the part of
recipient; (ii) recipient can demonstrate to have had Confidential Information
rightfully in its possession prior to disclosure; (iii) is independently
developed by recipient without the use of any Confidential Information; or (iv)
is information intended to be shared with CLIENT's customers or other third
party; or (v) recipient rightfully obtains from a third party who has the right
to transfer or disclose it.
Both parties agree to hold the Confidential Information confidential and
will not disclose it, and will prevent dissemination to any person who is not an
employee of CLIENT or SOFTBANK without the prior written consent of the other
party.
SOFTBANK acknowledges that it has all employees enter into an agreement
whereby they agree not to disclose or use the Confidential Information.
SOFTBANK agrees that as a result of SOFTBANK's performance of the services,
SOFTBANK enhances or improves the CLIENT's customer lists, such enhancements or
improvements will be the property of CLIENT.
All Confidential Information remains the property of the disclosing party
and no license or other rights in the Confidential Information are granted
hereby. Further, both parties agree to return all Confidential Information
regardless of the media in which it is stored, including, but not limited to,
records release to either party for marketing and distribution services,
immediately upon either party's written request and in the case of termination
or expiration of this Agreement, within thirty (30) days of such event.
Both parties acknowledge that unauthorized disclosure or us of Confidential
Information could cause irreparable harm and significant injury which may be
difficult to ascertain. Accordingly, both parties agree that the aggrieved
party will have the right to seek immediate injunctive relief from breaches of
this Agreement, in addition to any other rights and remedies it may have.
7. Proprietary Rights
------------------
SOFTBANK shall be the sole and exclusive owner of any technology and works
of authorship created by SOFTBANK and any modifications or derivative works that
are created by SOFTBANK in connection with its performance of this Agreement.
CLIENT acquires no right to use, transfer, assign, license or otherwise exploit
in any manner any portion thereof for any purpose whatsoever, unless CLIENT
shall have first negotiated and obtained on terms acceptable to SOFTBANK and
CLIENT an agreement stating otherwise to be incorporated herein.
8. Warranty Disclaimers
--------------------
THIS IS A SERVICE AGREEMENT, THEREFORE EXCEPT AS EXPRESSLY PROVIDED FOR
HEREIN, NEITHER PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND,
INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS OR
EITHER PARTY'S WORK OR PRODUCT FOR ANY PARTICULAR PURPOSE.
CONFIDENTIAL & PROPRIETARY
Page 2
<PAGE>
THE END-USER WILL RECEIVE THE BENEFITS AND WARRANTIES CONTAINED IN THE
CLIENT SOFTWARE LICENSE AGREEMENT THAT ACCOMPANIES EACH AND EVERY COPY OF THE
PRODUCT.
9. Limitation on Liability
-----------------------
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, OR TO ANY THIRD PARTY,
FOR ANY CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES (INCLUDING WITHOUT
LIMITATION LOST PROFITS) INCURRED BY EITHER PARTY AS A RESULT OF ANY BREACH BY
EITHER PARTY ARISING FROM OR RELATED TO THIS AGREEMENT, EXCEPT AS PROVIDED IN
SECTION 10 (INDEMNIFICATIONS) HEREOF. UNDER NO CIRCUMSTANCES SHALL SOFTBANK BE
LIABLE FOR ANY LOSSES INCURRED BY CLIENT ATTRIBUTABLE TO ANY ELECTRONIC DATA
TRANSFERS BY SOFTBANK.
10. Indemnifications
----------------
Notwithstanding any of the following, CLIENT will not be liable to
indemnify SOFTBANK under the terms of any provision to the extent SOFTBANK's
liability is in any way the result of SOFTBANK's error.
a) CLIENT shall indemnify and hold SOFTBANK harmless from any
demands, claims or suits from third parties for damages or expenses, including
attorney's fees, arising out of the use or sale of CLIENT's products or
SOFTBANK's use of CLIENT provided resources or information including, but not
limited to, suits or proceedings, based upon (i) a claim of infringement or
wrongful use of any patent, copyright, trade secret or other right of any third
party; or (ii) a claim of product defect or failure to conform to published
specification; or (iii) SOFTBANK's authorized use of CLIENT's Confidential
Information, in SOFTBANK's performance of this Agreement as provided herein; or
(iv) a claim of an unfair or deceptive act and practice of the CLIENT; or (v)
any acts, which do not comply with applicable State or Federal law and were
performed by SOFTBANK at the direction of the CLIENT.
(Section (b) below applies only when SOFTBANK will collect or compute sales or
us tax.)
(This section intentionally removed.)
(Section (c) below applies only when CLIENT has agreed to have SOFTBANK ship
product internationally from the United States.)
(This section intentionally removed.)
Section (d) below applies only when CLIENT has agreed to have SOFTBANK process
payments and/or fulfill order.)
(This section intentionally removed.)
In the event of a claim for indemnification arising out of the terms of or
services provided under this Agreement, each party to this Agreement agrees to
allow the other to audit applicable direct or indirect evidence in their
possession that may be probative in determining the validity of the claim.
11. Remittance Processing
---------------------
(This section applies only when CLIENT has agreed to have SOFTBANK process
payments and provide fulfillment services.)
(This section intentionally removed.)
12. SOFTBANK Fees
-------------
CLIENT agrees to SOFTBANK for the performance of it services in accordance
with the Service Fee & Responsibilities Attachment.
CONFIDENTIAL & PROPRIETARY
Page 3
<PAGE>
Within [***] from the end of each calendar month, SOFTBANK will submit an
---
invoice to CLIENT for such services. SOFTBANK reserves the right to adjust
monthly invoicing to weekly invoicing upon notification to CLIENT. SOFTBANK
invoices to CLIENT are payable within [***] of receipt. All SOFTBANK invoices
---
are immediately due and payable upon termination of this Agreement.
SOFTBANK reserves the right, without further notice, to assess a [***]
---
finance charge ([***] per annum) on any unpaid balances not paid within thirty
---
(30) days. In the event of a dispute between CLIENT and SOFTBANK concerning
fees, CLIENT agrees to make payment on the balance of fees that are not in
dispute in accordance with other terms of this section. If CLIENT does not pay
its invoice in full, reasonable justification for the unpaid amounts must be
presented to SOFTBANK within ten (10) days from the date that the invoice amount
is due or the CLIENT shall be deemed in default for non-payment. CLIENT must
provide a reasonable justification for any invoice disputes on previously paid
invoices within one hundred twenty (120) days from the date of invoice or shall
waive it right to dispute the fees.
All amounts payable to SOFTBANK by CLIENT or to CLIENT by SOFTBANK shall be
in United States currency, unless otherwise specifically provided in accordance
with this Agreement.
Set-up Fees and deposits must be paid prior to SOFTBANK's services being
provided. [***], as set forth in the Service Fee & Responsibilities Attachment,
---
[***]. Deposits may be applied towards any outstanding amounts due and owing and
---
are refundable upon payment of all outstanding invoices.
13. Commencement of Services
------------------------
SOFTBANK will use its best efforts to provide services to CLIENT at the
earliest possible date or by the start date set forth in the Specifications
Form. It is understood by the parties that if SOFTBANK assigns CLIENT a toll
free number, toll number, P.O. box or fax number prior to the commencement of
SOFTBANK services (for use in mailers, ads or other announcements) such numbers
will only be activated upon SOFTBANK's receipt of a fully executed contract and
applicable set-up fees and deposits.
14. Modifications
-------------
Definitions: "Material Change" is defined as any addition or alteration of
the terms of this Agreement that
(i) alters the original intent of the parties as expressed in
this Agreement; or
(ii) is inconsistent with any provision or this Agreement; or
(iii) adds services or fees not included in this Agreement; or
(iv) alters services or fees included in this Agreement.
"Non-Material Change" is defined as a change that
(i) initiates or curtails services and appropriate fees as
included in this Agreement; or
(ii) affects product additions or deletions; or
(iii) affects product price, weight, shipping and handling or
product release date to SOFTBANK; or
(iv) other change which does not constitute a material change as
defined above.
Modification: A material change shall be executed in writing and signed by
a duly authorized representative of each party. A non-material change shall be
agreed to by the CLIENT's Account Representative. Such Representative will have
the authority and will execute a Specifications Form or Set-Up Billing Form. Any
of the above executed documents shall be incorporated as part of this Agreement
and shall be binding upon both parties. Any changes will be implemented as per
CLIENT's request, upon SOFTBANK's receipt of an executed addendum or appropriate
form and at a time mutually agree upon by both parties.
15. Term of Agreement
-----------------
The term of this Agreement shall be for four (4) years from the date of
this Agreement. At such time the parties shall have the opportunity to renew and
/or renegotiate this Agreement. However, either party may renegotiate pricing at
any time after the first anniversary date of this Agreement, but no more
frequently than once in
___________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
CONFIDENTIAL & PROPRIETARY
Page 4
<PAGE>
any twelve (12) month period by giving written notice of the intent to
renegotiate along with a written revised pricing schedule. At the time of such
negotiations SOFTBANK guarantees that it will offer to CLIENT pricing that
equates to the best pricing offered to other SOFTBANK clients that maintain
programs/campaigns of like volume and similar service metrics to those of
CLIENT. If the parties cannot agree upon pricing modifications with sixty (60)
days of notification, either party may terminate this Agreement in accordance
with the default remedy (a), set forth below. If no new Agreement is made, this
Agreement shall remain in force and renew on an annual basis thereafter.
Notwithstanding the above, either party by written notice can terminate
this Agreement as follows:
a) for default if such party has previously given written notice including a
detailed description of the default by the other party and the other party
has not cured such default within sixty (60) days of receipt of written
notice; or
b) for default due to non-payment of fees under this Agreement, ten (10) days
after written notice is provided to recipient; or
c) without cause on thirty (30) days written notice of termination subject to
the following:
If either this Agreement or a new campaign/program is terminated by CLIENT
without cause CLIENT shall pay to SOFTBANK an amount equal to the higher of:
(i) the highest ninety (90) day forecast during the six (6)
months preceding the termination date of the Agreement or
campaign/program; or
(ii) three (3) times the average monthly billings during the six
(6) months preceding the termination of this Agreement or
campaign/program.
The remedies provided above in Section (c) are intended to reimburse
SOFTBANK for its investment in people and equipment relating to this Agreement,
plus all SOFTBANK Fees earned prior to the termination date. CLIENT acknowledges
that the actual amount of SOFTBANK's investment would be difficult to calculate
and agrees that such calculation shall not be required. In the event of default,
the parties shall have all remedies provided in this Agreement or otherwise
available under law.
Upon termination, each party shall return any Confidential Information of
the other party. Upon request and at the direction of the CLIENT, SOFTBANK
agrees to transfer toll free number phone lines accordingly, provided that all
amounts due SOFTBANK are paid and CLIENT has met all obligations pursuant to
this Agreement.
16. General Provisions
------------------
a) CLIENT grants SOFTBANK permission to install CLIENT's product on
SOFTBANK's internal network for SOFTBANK internal purposes only, including
training.
b) CLIENT acknowledges that SOFTBANK will retain a copy of the
customer order database as support for all transactions processed by SOFTBANK.
CLIENT agrees to cooperate and comply with any applicable laws or regulations
which otherwise require SOFTBANK to retain copies of CLIENT's records and to
cooperate and provide access to any documentation which may be requested of
SOFTBANK by governmental authorities.
c) SOFTBANK reserves the right to pass on any unanticipated price
increases from its suppliers that directly affect the pricing of this Agreement
and are effective during the term of this Agreement. This includes, but is not
limited to, freight, telephone, credit card fees and postal rates. Said price
increases shall be effective upon implementation of the price change by the
supplier.
d) CLIENT agrees that for quality control purposes SOFTBANK, at its
sole discretion, may contact CLIENT's customers previously serviced by SOFTBANK
to gather statistical information relating to customer satisfaction and
SOFTBANK's performance under this Agreement. Such contact may include a variety
of methods including, but not limited to, telephone, postal and email surveys,
in box questionnaires and focus groups.
CONFIDENTIAL & PROPRIETARY
Page 5
<PAGE>
e) This Agreement is not intended to create any relationship other
than CLIENT as consignor and SOFTBANK as consignee of the product covered by
this Agreement and SOFTBANK as independent contractor performing services
covered by this Agreement. Neither party is a partner or legal representative of
the other for any purpose whatsoever. It is understood between the parties that
SOFTBANK is not authorized to make any contract, agreement or warranty on behalf
of the CLIENT.
f) This Agreement contains the entire agreement between the parties
with the exception of the Attachments, Addendums or forms provided for in this
Agreement, which are incorporated herein. This Agreement shall supersede all
prior agreements and understandings between the parties with respect to the
subject matter hereof. To the extent that any provision contained in any other
document incorporated as part of this Agreement is inconsistent or conflicts
with this Agreement, the provisions of this Agreement shall control. This
Agreement may be amended only in writing signed by both parties or as otherwise
provided for in this Agreement.
g) Both parties agree to comply with all federal, state, local laws
and regulations that are applicable to the services to be provided herein.
h) This Agreement shall be governed by the laws of the State of New
York and the venue shall be Buffalo, New York.
i) Failure of either party to exercise it rights under this
Agreement shall not be construed as a waiver thereof and shall not prevent said
party from thereafter enforcing strict compliance with any of the terms thereof.
j) Any notice which may be or is required to be given under this
Agreement shall be written. Any written notices shall be sent by registered mail
or certified mail, postage prepaid, return receipt requested or by other prepaid
delivery method which is traceable. A fax notice does not constitute receipt of
written notice and must be followed by written notice. All such notices shall be
deemed to have been given when received and properly addressed as set forth
below. Either party may change its address by giving notice to the other party
pursuant to this Section.
All notices must be sent to:
SOFTBANK: CLIENT:
Upgrade Corporations of America BuyComp, LLC
d/b/a SOFTBANK Services Group 21 Brookline
699 Hertel Avenue Aliso Viejo, CA 92656
Buffalo, New York 14207 Attn: Brent Rusick
Attention: President V.P. Sales & Operations
Fax Number (716) 871-6668
cc: Contract Administrator
k) Neither party shall be liable for a failure or delay in the
performance of any of its obligations under this Agreement, except obligations
for the payment of money, if such delay or failure is caused by circumstances
beyond the reasonable control of the party affected. Strikes and other labor
difficulties which are not capable of being terminated on terms acceptable to
the party affected shall not be considered circumstances within the control of
such party.
l) No Assignment of this Agreement shall release CLIENT or change
CLIENT's primary responsibility to make payments under this Agreement. Upon
occurrence of any default under this Agreement, SOFTBANK may proceed directly
against CLIENT without the necessity of exhausting any remedies against any
assignee.
m) The terms and conditions of Sections 5, 6, 7, 8, 10, 12, 15 and
16(b)(d)(h) will survive any termination or expiration of this Agreement.
CONFIDENTIAL & PROPRIETARY
Page 6
<PAGE>
Acceptance:
BuyCorp.
By: ________________________________________ Date ____________________
Name & Title: Brent Rusick, VP Sales & Operations
Acceptance:
Upgrade Corporation of America d/b/a SOFTBANK Services Group:
By: ________________________________________ Date ____________________
Name & Title: Gary M. Crosby, Executive Vice President and CFO
CONFIDENTIAL & PROPRIETARY
Page 7
<PAGE>
SOFTBANK
MASTER SERVICE AGREEMENT
SERVICE FEE & RESPONSIBILITIES ATTACHMENT
BUYCOMP, L.L.C.
Fees Effective upon Commencement of Services
All services performed by SOFTBANK shall be rendered in accordance with the fees
defined herein:
<TABLE>
<CAPTION>
Service/SOFTBANK Responsibilities SOFTBANK Fee CLIENT Responsibilities
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. Set-Up Fees & Deposits
Payable Upon Execution of Contract
Set-Up Fee Quoted based on specific needs and set
forth in the [***]
---
(30000) Deposits (Refundable upon termination WAIVED
of the contract, provided outstanding
invoices have been paid.)
B. Campaign/Program Management:
(20400) Monthly Campaign/Program Management fee $[***] per month Provide campaign or program
--- specific information as requested
To be reviewed by the parties quarterly by the SOFTBANK Account Service
and adjusted as required and mutually Representative and as requested in
agreed upon to meet program needs. the Specifications Form.
Participate in development of
Telemarketing Call Guides,
providing information including
but not limited to:
Product capabilities &
technical requirements
Marketing research questions
(if required)
Sales and technical objections
Help desk issues
"End of Call" coding
</TABLE>
___________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL & PROPRIETARY
<PAGE>
<TABLE>
<S> <C> <C>
C. Inbound Service:
Customer Care (Note: SOFTBANK does not accept purchase
orders, check orders or tax exempt orders
via telephone.)
(25950) Inbound service - (Monday-Friday, 7:00 am [***] Provide customer service and pre-
--- sales information necessary
- 10:00 pm ET) associates working on CLIENT's
behalf.
Upon attainment of an average agent count
Includes questions concerning order of [***] SOFTBANK will provide a one time CLIENT must provide SOFTBANK with
--- a ninety (90) day rolling forecast
entry, shipment returns, refunds, credit to CLIENT of [***] that may be to be submitted to SOFTBANK on the
inventory levels, customer inquiries --- CLIENT Forecast Form, attached
and call back, add new records, applied prospectively toward future invoices hereto.
database edits, marketing/demographic at the rate of [***] so long as the average
surveys, after call work (ACW) when ---
applicable monthly agent count for the month to which
the credit is being applied is at or above
the rate of [***] seats.
---
A "seat" equates to [***] agent minutes per
---
month.
(25950) Minimum Quarterly Volume Commitment 01/01/99 - 03/31/99 [***] seat minimum In the event CLIENT's actual
--- volume does not meet the minimum
04/01/99 - 06/30/99 [***] seat minimum forecasted volume commitments.
--- CLIENT is responsible for payment
07/01/99 - 09/30/99 [***] seat minimum of fees as set forth under the
--- "SOFTBANK Fee" column. CLIENT
10/01/99 - 12/31/99 [***] seat minimum shall make monthly payments based
--- on the foregoing commitments and
01/01/00 - 09/30/02 [***] seat minimum said payments shall be reflected
--- in CLIENT's invoice.
A "seat" equates to [***] agent minutes per
---
month, or [***] agent minutes per quarter.
---
Dividing a quarter's actual inbound agent
minutes by [***] will determine whether the
---
minimum quarterly volume commitment has been
met.
If the minimum quarterly volume commitment
minutes [***] exceed actual billed agent
---
minutes for the quarter, CLIENT shall be
obligated for the shortfall minutes, and
will be billed the difference at the
prevailing per minute rate for inbound
service.
(3310) Electronic E-Mail Support [***] (pricing subject to review and CLIENT must provide documentation,
--- support specialist education,
re-negotiation after thirty (30) days of agent certification requirement,
operations.) web page access and design
requirements for web page if
applicable, and provide all other
information necessary to complete
electronic support specifications
as needed.
</TABLE>
___________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL & PROPRIETARY
Page 9
<PAGE>
<TABLE>
<CAPTION>
D. IVR (Interactive Voice Response) Services:
<S> <C> <C>
Inbound call fee: PER CAMPAIGN Provide first draft of script.
------------
(3300) Call Routing Minutes per Month Fee per Minute Provide sign-off for script and
----------------- --------------
(3230) Automated Technical Tips [***] [***] call-flow in timely manner
--- ---
before SOFTBANK begins to
program.
Automated Dealer Locator Provide Closed and Holiday
Schedule
(3210) Automated Order Inquiry [***]
---
(3210) Automated Registration + phone charges (See Telecommunications) If applicable:
(3328) Tel-Address(SM) (CLIENT provided Database) . Provide first draft of
"tech tips" (Q&As) and symptom
based logic in script format.
. Provide dealer database in
acceptable SOFTBANK format
that includes telephone
numbers with area codes (no
Toll Free numbers).
. Provide Business Rules for
how dealers will be found.
. Provide campaign or program
specific information
including, but not limited to:
Product description, customer
pricing information, survey
data, acceptable payment
options and applicable
customer S&H charges.
. Provide registered or
prospective user database
(with unique numeric
identifier), on acceptable
media and in an applicable
format readable by SOFTBANK.
(?) Custom voice talent (Quote based on specific needs)
E. Telecommunications
(9311) T-1 Voice Interface Set-Up [***] CLIENT is responsible for
---
operational ability to
interface with [***] located
---
at SOFTBANK's facility.
T-1 Voice maintenance fee
Telecom Maintenance Fee
(Notwithstanding Section 16(k) of the
Agreement, CLIENT shall be required to
reimburse SOFTBANK [***] per agent hour
---
in the event CLIENT provided telephone
lines are rendered inoperable, regardless of
the cause.)
Inbound switched access for CLIENT T1 $[***]
---
overflow. (includes access fee & taxes)
(8100) Additional Toll Free lines (if applicable) $[***]
---
</TABLE>
_____________________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed separtely
with the Securities and Exchange Commission.
CONFIDENTIAL & PROPRIETARY
Page 10
<PAGE>
<TABLE>
<S> <C> <C>
(beyond three (3) on sales programs and/or one (1)
on automated technology or technical support
programs)
Phone charges: (if applicable)
(9001) Toll Free inbound - SOFTBANK lines Carrier rates
(includes line/access charges + taxes)
(N/A) Toll inbound CUSTOMER pays toll charges
(9210) Toll outbound calls and call backs Carrier rates
(includes toll charges + taxes)
F. Administrative:
(19500) Custom reporting/additional data imports/specialized $[***]
---
data transfers billed in [***] increments,
---
1 hour minimum
+ fee transfer, if applicable
(19510) Campaign/program modifications beyond initial set-up $[***]
---
(e.g. CLIENT requested changes or additions, call
guide updates, telecommunications programming, billed in [***] minute increments,
---
prompt changes, custom fax cover pages (CLIENT to
supply artwork), additional fax documents, etc.) 1 hour minimum
(14510) Training (includes client/product training provided
by CLIENT or by SOFTBANK and includes agent and/or
trainer time) Provide training to
SOFTBANK Associates or
Training $[***] appropriate training
---
Overtime training $[***] information or
---
documentation covering
specifics of the product
and details of the
campaign/program for
SOFTBANK to provide
training to its
employees.
Provide additional
training as needed on an
ongoing basis to support
any additions or
modifications to existing
programs.
All related training
expenses, such as travel,
shall be the
responsibility of the
CLIENT.
G. End of Campaign/Program:
(19495) Reporting/analysis (Quote based on specific needs)
(20230) Data transfer (Quote based on specific needs)
</TABLE>
*Pricing negotiable on a quarterly basis during the first year of online
services.
___________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL & PROPRIETARY
Page 11
<PAGE>
CLIENT FORECAST FORM
--------------------
CLIENT must provide SOFTBANK with a ninety (90) day rolling forecast to be
submitted to SOFTBANK on this CLIENT Forecast Form. In the event SOFTBANK does
not receive an ongoing forecast, it shall be entitled to rely upon the previous
forecast for ongoing personnel planning.
Client ID Number: __________________ Client Name: BuyComp, L.L.C.
-----------------
Campaign Number: __________________ Campaign Start Date:_________________
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
90 DAY FORECAST
1st Period 2nd Period 3rd Period
(Period must be equivalent to a billing/reporting period.)
-----------------------------------------------------------------
Forecast Period Date
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Inbound Talk Minutes
-------------------------------------------------------------------------
ACW Minutes
---------------------------------------------------------------------------------------------------------------
Outbound Agent Hours
---------------------------------------------------------------------------------------------------------------
MFRP Mail orders
Fax Orders
---------------------------------------------------------------------------------------------------------------
ETS Cases
===============================================================================================================
</TABLE>
The foregoing is the undersigned's forecast of volume under the services
agreement between CLIENT and SOFTBANK Services Group.
SOFTBANK Services Group BuyComp, L.L.C.
_____________________________ ______________________________
Signature Signature
_____________________________ ______________________________
Signator's Printer Name Signator's Printer Name
General Manager
- ----------------------------- ______________________________
Signator's Title Signator's Title
_____________________________ ______________________________
Date Date
CONFIDENTIAL & PROPRIETARY
<PAGE>
EXHIBIT 10.7
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
RESALE AGREEMENT
This Agreement ("Agreement") is by and between Buy.com Inc. ("Buy.com"), with
its principal place of business at 21 Brookline, Aliso Viejo, California 92656,
and Ingram Micro Inc. ("Ingram") excluding its subsidiaries, with its principal
place of business at 1600 East St. Andrew Place, Santa Ana, California 92705.
This Agreement will include shipments to Buy.com's locations in the United
States only.
1. Purpose
The purpose of this Agreement is to provide the terms and conditions
for the purchase and resale by Buy.com and the sale by Ingram to
Buy.com of various computer products including both hardware and
software offered by Ingram to its customers ("Product"), excluding
electronic software distribution (ESD) product.
2. Terms of Sale
A. Buy.com will source all of its Product requirements from Ingram
during the term of this Agreement, provided that the Product is
available at the time Buy.com places its order. In the even the
Product is not available or is not offered to Buy.com by Ingram,
Buy.com shall have the right to source such Product from another
source.
B. If authorization for resale is required by the vendor of any
Product, then Ingram will not be obligated to sell such Product to
Buy.com unless Ingram has received such required authorization. If any
vendor prohibits Ingram from selling a specific Product to Buy.com,
then Ingram reserves the right not to sell said Product to Buy.com.
C. Ingram and Buy.com will work towards the implementation of Inside
Line which provides pricing and on-line availability.
3. Ordering
A. Buy.com will compile, update, and provide Ingram with Product order
information. The Product order information will include the (i)
Product type(s), (ii) unit quantity, (iii) Ingram SKU number and/or
vendor part number, (iv) Buy.com purchase price from Ingram, and (v)
correct shipping address. For government orders, Buy.com will compile
the above Product order information as well as (i) end user name and
zip code and (ii) government contract number. Buy.com personnel will
identify, for each Product order, the ship-to destination as either
Buy.com, Buy.com's customer, or to some other specified third party.
Ingram will, subject to Product availability, use its best efforts to
fill and ship all Product orders placed by Buy.com within one (1)
business day of order receipt.
B. Ingram will accept orders over telephone, via facsimile, and via
Ingram approved electronic ordering methods as defined in Ingram's
Catalog only from those who identify themselves as Buy.com personnel
and provide the Ingram customer number prior to placing the order.
Ingram will have no obligation to confirm the validity of any order
________________________________________________________________________________
Page 1
<PAGE>
placed or the authority of the person placing an order in this manner.
Buy.com will disclose its Ingram customer number only to its personnel
with a need to know.
C. Ingram will [***] for all of Buy.com's Product orders.
---
4. Volume Commitment
Buy.com agrees that its annual Ingram purchases will meet or exceed
[***] for the term of this Agreement. This annual purchase goal may be
---
reviewed and adjusted quarterly. If Buy.com fails to achieve this run
rate within six (6) months from the effective date of this Agreement,
Ingram reserves the right to review and adjust the pricing as stated
in Section 5.
5. Pricing
A. Buy.com's prices for Product purchases, excluding those listed in
Exhibit A, will be Ingram Cost plus the percentage listed below for
the applicable Product types. Exhibit A provides a list of vendors for
which the pricing is adjusted individually and separately from the
pricing listed below.
Product Type Cost Plus %
Software [***]
Hardware [***]
Accessory [***]
Technical [***]
NOTE: Certain Product purchases, including but not limited to [***],
may not be included in the above pricing.
B. As Ingram's costs change, prices to Buy.com may be adjusted to
reflect those changes.
C. Ingram represents to Buy.com that it believes that the [***] being
offered to Buy.com pursuant to this Agreement, when considered in the
aggregate, [***]. On a quarterly basis during the term of this
Agreement, Ingram and Buy.com will meet to review current market
prices and terms for the Products and services being offered by Ingram
to Buy.com pursuant to this Agreement. At such meetings, the parties
will discuss in good faith amendments to such prices and terms, if
necessary, in order to render the [***] provided by Ingram to Buy.com,
when considered in the aggregate, [***].
______________________
[***] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
________________________________________________________________________________
Page 2
<PAGE>
6. Payment Terms
A. Buy.com shall furnish to Ingram all financial information
reasonably requested by Ingram from time to time for the purpose of
establishing or continuing Buy.com's credit limit, it being understood
that Ingram shall have the right to decline to extend credit to
Buy.com and to require that the applicable purchase price be paid
prior to shipment. Ingram shall have the right from time to time,
without notice, to change or revoke Buy.com's credit limit on the
basis of changes in Ingram's credit policies or Buy.com's financial
condition and/or payment record.
B. Ingram will invoice Buy.com upon Product shipment, and all invoices
will be due and payable net [***] ([***]) days from the invoice date.
--- ---
Ingram will provide an Early Pay Discount of [***] ([***]) on all
--- ---
invoices for which payment is received by wire transfer within three
(3) days of invoice date. A service charge of the lesser of [***]
---
([***]) per month or the maximum amount allowed by law will be charged
---
on all past due balances to defray Ingram's costs of carrying such
balance. Credit cards (MasterCard, VISA and Discover Card) will only
be accepted at the time of order or purchase. Payment for all other
orders must be made in accordance with the terms in effect at the time
the order was placed.
C. In the event Buy.com fails to make timely payment of any amount
invoiced hereunder, Ingram shall have the right, in addition to any
and all other rights and remedies available to Ingram, at law or in
equity, to immediately revoke any or all credit extended, to delay or
cancel future deliveries and/or to reduce or cancel any or all
quantity discounts extended to Buy.com. Buy.com shall pay all costs of
collection, including reasonable attorneys' fees.
D. Any obligation of Ingram under these terms and conditions to
deliver Products on credit terms shall terminate without notice if
Buy.com files a voluntary petition under a bankruptcy statute, or
makes an assignment for the benefit of creditors, or if an involuntary
petition under a bankruptcy statute is filed against Buy.com, or if a
receiver or trustee is appointed to take possession of the assets of
Buy.com.
7. Shipping
A. All orders will be shipped F.O.B. origin, Ingram's carrier of
choice, with all ground freight charges paid by Ingram for shippable
Product orders over [***] ([***]). In the event an authorized Buy.com
--- ---
representative requests a priority shipping method, Buy.com agrees to
use an Ingram authorized carrier and to pay all such freight costs.
B. For fulfillment orders all Product shipped directly to Buy.com's
customers will be packaged with no reference to Ingram. Specifically,
the packaging will not display any Ingram trademark, service mark,
logo, or trade name. If the carrier requires a return
______________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
________________________________________________________________________________
Page 3
<PAGE>
address, Ingram may use its warehouse address, without its company
name on such shipment.
C. Buy.com or its customer shall examine all Products promptly upon
receipt thereof. No later than thirty (30) days after receipt, Buy.com
shall notify Ingram of all claimed shortages or damaged Products or if
rejection is intended, shall specify all grounds therefor. Failure to
give such notice shall be deemed an acceptance of the Products as of
the date of shipment.
8. Returns
A. Buy.com agrees to make separate requests for stock balance and
defective returns. All returns must be accompanied by a valid Ingram
Return Material Authorization ("RMA") number. Each return must be
packaged separately for each RMA and contain only Product specified on
that RMA. All RMA's are valid for thirty (30) days from the date of
issuance.
B. Stock Balancing
1. For systems vendor returns, Ingram will allow Buy.com stock
balance returns for up to [***] ([***]) days from the date of
--- ---
invoice, subject to vendor requirements or restrictions. Buy.com
will have Product return privileges on overstocked resalable
Products purchased from Ingram of up to [***] ([***]) of its
--- ---
previous [***] ([***]) days purchases, less any stock balance
--- ---
returns. Credit for returns is calculated at the last purchase
price or the current price, whichever is lower.
2. For non-systems vendor returns, Ingram will allow Buy.com
stock balance returns for up to [***] ([***]) days from the date
--- ---
of invoice, subject to vendor requirements or restrictions.
Buy.com will have Product return privileges on overstocked
Product purchased from Ingram of up to [***], less any stock
---
balance returns. Credit for returns is calculated at the last
purchase price or the current price, whichever is lower.
3. Ingram reserves the right not to accept Products which are (a)
no longer in production or (b) are being produced or published by
a manufacturer which is insolvent or which has declared
bankruptcy or (c) subject to more restrictive stock balancing
policies issued by the Product's manufacturer or publisher.
Buy.com shall pay all costs and bear all risks of loss when
returning Products to Ingram. Configured Products may not be
stock balanced.
______________________
[***] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
________________________________________________________________________________
Page 4
<PAGE>
C. Defective Returns
1. Buy.com may return to Ingram for replacement or credit any
Products (other than Configured Products) found to be defective
within ninety (90) days of purchase or any Configured Products
which are found to be defective within thirty (30) days of
purchase. Buy.com must obtain Ingram's approval prior to
returning the Products. Ingram reserves the right to require
Buy.com to return defective Products directly to the Products'
manufacturer for replacement according to the manufacturer's
defective Products return policy.
2. Ingram shall not be obligated to repair or replace Products
rendered defective, in whole or in part, by causes external to
the Products, such as, but not limited to catastrophe, power
failure or transients, overvoltage on interface, environment
extremes, improper use, maintenance and application of the
Products or use of unauthorized parts.
9. Marketing Funds
A. Ingram and Buy.com agree to the terms of the Marketing Agreement
incorporated herein as Exhibit B.
10. Confidentiality
A. For a period of two (2) years from the date of disclosure to the
other party, both parties agree that they will not disclose to third
parties the Confidential Information, as hereafter defined, of the
other without the other party's prior written permission. Confidential
Information shall mean all proprietary information and/or trade
secrets (including but not limited to Buy.com customer information)
regardless of the form in which it is transmitted, which (a) if
disclosed in tangible form bears a legend indicating that it is
confidential or proprietary; or (b) if disclosed orally or visually
only, is identified as confidential or proprietary at the time of
disclosure and is documented as such in writing and a non-confidential
written summary of the disclosure is provided to the other party
within thirty (30) days of the date of disclosure. Confidential
Information will only be used by the parties in furtherance of this
business relationship. Ingram agrees not to use Buy.com's Confidential
Information to solicit or develop business directly with Buy.com's
customers.
B. The foregoing obligations not to disclose Confidential Information
shall not apply with respect to a party's Confidential Information
that: (i) was in the possession of or known by the other party without
an obligation of confidentiality prior to receipt from the disclosing
party; (ii) is or becomes general public knowledge through no fault or
acts of the other party; (iii) is or becomes lawfully available to the
other party from a third party which, to the other party's knowledge,
is not subject to an obligation of confidentiality; (iv) in
independently developed by the other party without use of any
Confidential Information; or (v) the other party is advised by counsel
is required to be disclosed by any governmental agency or pursuant to
any law, code or regulation, provided the disclosing party notifies
the other party in writing as soon as it becomes aware of the
________________________________________________________________________________
Page 5
<PAGE>
disclosure requirement so as to afford the other party every
opportunity to take whatever steps it deems necessary to protect the
confidentiality of the information. In the event that Buy.com
determines that it must file this Agreement as an exhibit to any
registration statement it files with the U.S. Securities and Exchange
Commission (the "SEC"), confidential treatment for the filing will
permit Ingram to review and approve the portions of this Agreement for
which confidential treatment is requested at least seventy-two (72)
hours prior to the filing, and will permit Ingram to participate in
any discussions it or its representatives may have with the SEC with
respect to such request.
11. Taxes
Buy.com shall bear applicable federal, state, municipal, and other
government taxes (such as sales, use, etc.). Unless otherwise
specified, list prices do not include such expenses, and they will
appear, if applicable, as separate, additional items on the invoice.
Exemption certificates, valid in the place of delivery, must be
presented to Ingram prior to shipment if they are to be honored.
12. Warranty
Product warranties, if any, are provided by the manufacturer/publisher
of the Products. Ingram makes no warranties whatsoever. Ingram's sole
obligation (and Buy.com's sole remedy) in the event of breach of any
warranty shall be the repair or replacement of defective Products. IN
NO EVENT SHALL INGRAM BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES OR
DAMAGES OF ANY KIND OR NATURE ALLEGED TO HAVE RESULTED FROM ANY BREACH
OF WARRANTY. INGRAM DOES NOT WARRANT THE MERCHANTABILITY OF THE
PRODUCTS OR THEIR FITNESS FOR ANY PARTICULAR PURPOSE. INGRAM MAKES NO
WARRANTY, EXPRESS OR IMPLIED, OTHER THAN THOSE SPECIFICALLY SET FORTH
HEREIN.
13. Patent and Trademark Indemnity
INGRAM SHALL HAVE NO DUTY TO DEFEND, INDEMNIFY, AND HOLD HARMLESS
BUY.COM FROM AND AGAINST ANY OR ALL DAMAGES AND COST INCURRED BY
BUY.COM ARISING FROM THE INFRINGEMENT OF PATENTS OR TRADEMARKS OR THE
VIOLATION OF COPYRIGHTS BY PRODUCTS. NOTWITHSTANDING ANY OTHER TERMS
OR CONDITIONS TO THE CONTRARY, INGRAM'S LIABILITY UNDER THIS SECTION
SHALL NOT EXCEED THE PURCHASE PRICE OF THE INFRINGING PRODUCT.
14. Limitation of Liability
INGRAM SHALL NOT BE LIABLE TO BUY.COM, BUY.COM'S CUSTOMERS, OR OTHER
PARTY FOR ANY LOSS, DAMAGE, OR INJURY WHICH RESULTS FROM THE USE OR
APPLICATION BY BUY.COM, BUY.COM'S CUSTOMER, OR ANY OTHER PARTY OF
PRODUCTS DELIVERED TO BUY.COM, UNLESS THE LOSS OR DAMAGE RESULTS
DIRECTLY FROM THE INTENTIONALLY
________________________________________________________________________________
Page 6
<PAGE>
TORTIOUS OR FRAUDULENT ACTS OR OMISSIONS OF INGRAM. IN NO EVENT SHALL
INGRAM BE LIABLE TO BUY.COM OR ANY THIRD PARTY FOR LOSS, DAMAGE, OR
INJURY OF ANY KIND OR NATURE ARISING OUT OF OR IN CONNECTION WITH
THESE TERMS AND CONDITIONS, OR ANY AGREEMENT INTO WHICH THEY ARE
INCORPORATED, OR ANY PERFORMANCE OR NONPERFORMANCE UNDER THESE TERMS
AND CONDITIONS BY INGRAM, ITS EMPLOYEES, AGENTS OR SUBCONTRACTORS, IN
EXCESS OF THE NET PURCHASE PRICE OF THE PRODUCTS ACTUALLY DELIVERED TO
BUY.COM HEREUNDER. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR ANY THIRD PARTY FOR INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING, BUT NOT LIMITED TO LOSS OF GOOD WILL, LOSS OF
ANTICIPATED PROFITS, OR OTHER ECONOMIC LOSS ARISING OUT OF OR IN
CONNECTION WITH EITHER PARTY'S BREACH OF, OR FAILURE TO PERFORM IN
ACCORDANCE WITH ANY OF THESE TERMS AND CONDITIONS, OR THE FURNISHING,
INSTALLATION, SERVICING, USE OR PERFORMANCE OF ANY PRODUCTS PROVIDED
HEREUNDER, EVEN IF NOTIFICATION HAS BEEN GIVEN AS TO THE POSSIBILITY
OF SUCH DAMAGES. BOTH PARTIES HEREBY EXPRESSLY WAIVE ANY AND ALL
CLAIMS FOR SUCH DAMAGES. IN NO EVENT SHALL INGRAM HAVE ANY LIABILITY
FOR ANY PRODUCTS USED FOR AVIATION, MEDICAL, LIFESAVING, LIFE
SUSTAINING OR NUCLEAR APPLICATIONS.
15. Compliance with U.S. Export Laws
The Products are sold to Buy.com for resale in the United States only.
In the event Buy.com delivers the Products to a customer who may use
the Products outside the United States, Buy.com acknowledges and shall
advise its customers that the Products are controlled for export by
the U.S. Department of Commerce and that the Products may require
authorization prior to export from the United States or re-export.
Buy.com agrees that it will not export, re-export, or otherwise
distribute Products, or direct products thereof, in violation of any
export control laws or regulations of the United States. Buy.com
warrants that it will not export or re-export any Products with
knowledge that will be used in the design, development, production, or
use of chemical, biological, nuclear, or ballistic weapons, or in a
facility engaged in such activities, unless Buy.com has obtained prior
approval from the Department of Commerce. Buy.com further warrants
that it will not export or re-export, directly or indirectly, any
Products to embargoed countries, including, but not limited to, Cuba,
Libya, North Korea, Iran, Iraq, Sudan and Syria. Diversion of Products
contrary to U.S. law is prohibited.
16. Manufacturer/Publisher Restrictions
All Products delivered by Buy.com hereunder may have additional
restrictions on their use required by manufacturer/publisher. Buy.com
is solely responsible for ensuring its adherence to any and all such
restrictions or requirements.
________________________________________________________________________________
Page 7
<PAGE>
17. Severability
A judicial determination that any provision hereunder is invalid in
whole or in part shall not affect the enforceability of those
provisions not found to be invalid.
18. Reconciliation
Both parties mutually agree to reconcile Buy.com's account every
ninety (90) days from the effective date of this Agreement. In order
to allow appropriate credits to be applied, Buy.com agrees to provide
appropriate documentation as listed in Exhibit C to Ingram and wait
thirty (30) days from the date of the disputed claim before debiting
Ingram for any reason.
19. Notices
All notices and other communications relating to this Agreement or its
terms will be in writing and mailed via first class United States
Postal Service, certified or registered with return receipt requested
or via facsimile. All notices so mailed will be deemed received two
(2) days after postmark date and facsimile will be deemed received
upon notification of successful transmission.
20. Choice of Law/Choice of Forum
This Agreement shall be deemed to have been executed and delivered in
Santa Ana, California, and shall be construed, interpreted and
enforced under and in accordance with the internal laws of the State
of California, excluding its conflicts or choice of law rule or
principles which might refer to the law of another jurisdiction. The
parties agree to exercise any right or remedy in connection with this
Agreement exclusively in, and hereby submit to the jurisdiction of the
State of California, Courts of Orange County, California, or the
United States District Court at Santa Ana, California. The state and
federal courts situated in Orange County, California will have non-
exclusive jurisdiction and venue over any dispute or controversy,
which arises out of this Agreement.
21. Binding Effect/Assignment
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, and their respective representatives, successors
and permitted assigns. Neither party may assign its rights and/or
duties under this Agreement without prior written consent of the other
party given at the other party's sole option; except that Ingram may
assign this Agreement to a subsidiary or affiliate upon notice to
Buy.com. Any such attempted assignment shall be void.
22. Headings
This Agreement may be executed in any number of original counterparts,
each of which when executed and delivered will be deemed to be an
original and all of which taken together will constitute but one and
the same instrument. Headings in this Agreement are
________________________________________________________________________________
Page 8
<PAGE>
included for convenience of reference only and will not constitute a
part of this Agreement for any other purpose.
23. Attorneys Fees
In the event there is any dispute concerning the terms of this
Agreement or the performance of any party hereto pursuant to the terms
of this Agreement, and any party hereto retains counsel for the
purpose of enforcing any of the provisions of this Agreement or
asserting the terms of this Agreement in defense of any suit filed
against said party, each party shall be solely responsible for its own
costs and attorney's fees incurred in connection with the dispute
irrespective of whether or not a lawsuit is actually commenced or
prosecuted to conclusion.
24. Term and Termination
This Agreement will commence on the date of the last signature set
forth below an will continue for one (1) year. Either party may
terminate this Agreement without cause by giving one hundred twenty
(120) days advance written notice to the other party. The termination
provisions in Exhibit B shall apply only to Exhibit B and Clause 9 of
this Agreement. Ingram may terminate this Agreement immediately for
cause upon written notice, which notice will include a ten (10) day
opportunity to cure.
25. Entire Agreement
This Agreement (including any Exhibits and Addenda) constitutes the
entire Agreement between the parties pertaining to the subject matter
hereof, and will cancel, terminate, and supersede any and all previous
agreements, proposals, representations, or statements, whether oral or
written. The terms of this Agreement will supersede the terms of any
invoice or purchase order issued by either party. Any modifications of
this Agreement must be in writing and signed by an authorized
representative of each party.
This Agreement will become effective as of the last date of signature by the
authorized parties below.
"Buy.com" "Ingram"
By:_____________________________ By:_____________________________
(Officer of the Company) (Officer of the Company)
Name:___________________________ Name:___________________________
(Please print or type) (Please print or type)
Title:__________________________ Title:__________________________
Date:___________________________ Date:___________________________
_______________________________________________________________________________
Page 9
<PAGE>
August 11, 1999
Debbie Tibey
Senior Vice President of Sales
Ingram Micro, Inc.
1600 East St. Andrew Place
Santa Ana, CA 92705
Re: Amendment to Resale Agreement
Dear Debbie:
This will amend the Resale Agreement between Ingram Micro, Inc. and BUY.COM Inc.
dated March 10, 1999 (the "Resale Agreement"). When signed on behalf of Ingram
Micro Inc., Section 24 of the Resale Agreement will be replaced with the
following:
24. Term and Termination
This Agreement will commence on the date of the last signature set
forth below and will continue for one (1) year, Either party may terminate
this Agreement without cause by giving one hundred twenty (120) days
advance written notice to the other party. The termination provisions in
Exhibit B shall apply only to Exhibit B and Clause 9 of this Agreement.
Ingram may terminate this Agreement immediately for cause upon written
notice, which notice will include a ten (10) day opportunity to cure.
Unless and until either party provides at least 120 days prior written
notice of its intention not to extend the term of this Agreement, this
Agreement shall automatically renew for additional one (1) year term.
Except as amended by this letter agreement, the Resale Agreement will remain in
full force and effect between our companies.
Sincerely,
Greg Hawkins
Chief Executive Officer
Accepted and Agreed this
_______day of_____, 1999.
Ingram Micro, Inc.
By: ________________________
Debbie Tibey
Senior V.P. of Sales
______________________________________________________________________________
Page 1
<PAGE>
EXHIBIT B
Marketing Agreement
Ingram's Marketing Department understands the needs and requirements that
Buy.com has in order to meet its specific business objectives and future goals.
Ingram's Product Marketing and Reseller Marketing team is committed to work with
key contacts at Buy.com to facilitate an ease of doing business, increase
communication between our companies and collaborate in meeting Buy.com's
established marketing goals.
To achieve Buy.com's vendor-funding goals, Ingram will commit to best efforts in
working jointly with Buy.com to secure [***] based on a level equal to [***] of
--- ---
Buy.com's [***] with a maximum amount of [***] period. Notwithstanding any
---
other provision to the contrary herein, this marketing agreement is contingent
upon Buy.com achieving and maintaining [***].
---
To effectively facilitate this agreement, Ingram will assemble and assign a team
of associates to manage all aspects of the Ingram and Buy.com marketing
relationship. Ingram [***] sales team, a sales manager, a marketing manager,
---
and pass through, administration and analysis support. These sales associates,
and the marketing management team, will work closely with the Buy.com sales team
to initiate and drive marketing programs. Ingram will develop a [***] for the
---
assigned sales associates. Ingram will assemble this team within [***] of
---
effective date of this marketing agreement. The [***] to the Buy.com account.
---
The marketing team will be [***] that meet the funding requirements of Buy.com.
---
[***] will be mutually defined between Buy.com and Ingram within [***] of the
--- ---
effective date of this marketing agreement. Progress to assigned goal will be
evaluated monthly by both parties. If [***] are underachieved, Buy.com has a
---
right to terminate the marketing agreement with [***] written notice to Ingram
---
if Ingram fails to cure the underachievement within [***] of the notice of
---
termination.
The accomplishment of [***] will be measured by the [***] to Buy.com either
--- ---
through Ingram [***] secured by either Ingram or Buy.com. All [***] currently
--- ---
secured and [***] will count towards the calculation of goal achievement.
---
Reporting on all pass through transactions, through Ingram, will be available
and provided on a weekly basis to a designated contact at Buy.com.
As an integral component of the marketing programs, the assigned associates will
spend a mutually agreed upon length of time working at Buy.com's corporate
location in order to acquire a full comprehension of Buy.com business model and
available marketing vehicles. Buy.com will provide for adequate workspace for
Ingram associates to facilitate vendor meetings and participate in training and
informational updates on site at the Buy.com corporate location.
___________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
_______________________________________________________________________________
Page 1
<PAGE>
Facilitation of necessary training and the development of promotional collateral
and sales tools will be a joint responsibility of Ingram and Buy.com. Each
party will bear its own expenses in the preparation of these materials.
Responsibilities will include managing all marketing communications and
activities related to the successful promotion and solicitation of Ingram Micro
product marketing and purchasing associates and vendor partners in participation
of Buy.com marketing vehicles. Specifically the marketing team will be
chartered with the following responsibilities:
. Act as primary interface for overall marketing management
. Act as point persons for product marketing managers, buyers, and Ingram Micro
vendor partners with respect to Buy.com marketing programs
. Coordinate product marketing and vendor training and presentations
. Schedule and drive key meetings
. Manage development, follow-up, and reporting of Buy.com activity
solicitations
. Act as point persons for Buy.com pass through approvals and credits
. Understand Buy.com's business model, its position in the marketplace and end
user market segments
. Plan, develop, and coordinate necessary and approved marketing activities and
opportunities as related to Ingram associates and vendor partners
. Research, inquire, and develop channel of incremental funding from vendors in
support of Buy.com marketing programs.
As part if this marketing program, and for the duration of this marketing
agreement, Ingram will charge a [***] secured on behalf of Buy.com. This
---
[***] will apply to all [***] secured by either Ingram Micro or Buy.com
--- ---
including [***], upgrades, renewals and vendor advertising contracts
---
changes. The [***] does not apply to contracts in place prior to this
---
Agreement, except for the following vendors:
Vendor Contract Start Date
------ -------------------
1. [***] [***]
--- ---
2. [***] [***]
--- ---
3. [***] [***]
--- ---
4. [***] [***]
--- ---
5. [***] [***]
--- ---
6. [***] [***]
--- ---
7. [***] [***]
--- ---
8. [***] [***]
--- ---
The [***] will be utilized by Ingram to offset the costs associated with
---
building the infrastructure and maintaining the resources required in providing
marketing and sales services to Buy.com.
_____________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
________________________________________________________________________________
Page 2
<PAGE>
Ingram will collect the [***] via [***] upon receipt of an invoice and proof of
--- ---
performance provided by Buy.com and issuing a credit to buy.com [***]. Buy.com
---
will provide Ingram with a monthly report detailing [***]. Ingram will [***].
--- ---
___________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
________________________________________________________________________________
Page 3
<PAGE>
EXHIBIT 10.33
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
BUY.COM INC.
21 Brookline
Aliso Viejo, CA 92656
September 2, 1999
SOFTBANK America Inc.
300 Delaware Ave.
Suite 909
Wilmington, DE 19801
Attention: Steve Murray
Dear Gentlemen:
This letter agreement (the "Agreement") sets forth the principal terms
upon which Buy.Com Inc., a Delaware corporation ("Buy.Com"), on the one hand,
and SOFTBANK America Inc. and/or one or more of its affiliated entities
referenced in this Agreement (all such entities collectively referred to as
"SoftBank"), on the other hand, will form three separate joint ventures. The
principal terms of each of the joint ventures are set forth in Exhibit A,
---------
Exhibit B and Exhibit C (each a "Term Sheet" and collectively, the "Term
- --------- ---------
Sheets"). This Agreement is being entered into contemporaneously with the
execution and delivery of that certain Series B Participating Convertible
Preferred Stock Purchase Agreement (the "Series B Agreement") of even date
herewith (the "Series B Preferred Stock Financing").
1. Buy.Com Europe. Buy.Com and SoftBank America Inc. will form a joint
--------------
venture according to the principal terms set forth in the Term Sheet attached
hereto as Exhibit A. The provisions set forth in the Term Sheet attached hereto
---------
as Exhibit A are intended to be binding on Buy.Com and SoftBank, subject to the
---------
Closing of the Series B Preferred Stock Financing.
2. Buy.Com UK. Buy.Com and eVentures will form a joint venture according
----------
to the principal terms set forth in the Term Sheet attached hereto as Exhibit B.
---------
The provisions set forth in the Term Sheet attached hereto as Exhibit B are
---------
intended to be binding on Buy.Com and eVentures, subject to the Closing of the
Series B Preferred Stock Financing.
3. Buy.Com Japan. Buy.Com and SoftBank America Inc. will form a joint
-------------
venture according to the principal terms set forth in the Term Sheet attached
hereto as Exhibit C. The provisions set forth in the Term Sheet attached hereto
---------
as Exhibit C are intended to be binding on Buy.Com and SoftBank, subject to the
---------
Closing of the Series B Preferred Stock Financing.
4. Exclusive Negotiations. Each of the parties shall negotiate in good
----------------------
faith and cooperate fully with each other in the negotiation and execution of
the definitive joint venture documents for each of the three joint ventures.
Between the date that is 90 days from the date hereof or such earlier date as
the parties hereto mutually agree, SoftBank and Buy.Com will not (and it will
assure that its officers, directors, employees, affiliates and legal, accounting
and financial advisors do not on its behalf) take any action to solicit,
initiate, seek, encourage, support or entertain any inquiry, proposal or offer
from, furnish any information to, or participate in any negotiations with, any
corporation, partnership, person or other entity or group (other than
<PAGE>
Softbank
September 2, 1999
Page 2
negotiations with each other) regarding any international e-commerce joint
venture in the territories referenced in the Term Sheets.
5. No Public Announcement; No Disclosure. The parties shall make no
-------------------------------------
public announcement concerning this Agreement or the matters contemplated
herein, their discussions or any other memoranda, letters or agreements between
the parties relating to the matters contemplated herein without the prior
consent of the other party; provided, that either of the parties may at any time
make disclosure if it is advised by independent legal counsel that such
disclosure is required under applicable law or regulatory authority. Except as
permitted by the preceding proviso, under no circumstances will the parties (or
any of their respective officers, directors, employees or affiliates) discuss or
disclose the existence or terms of this Agreement (or that the parties are
holding discussions) with or to any third party other than such legal,
accounting and financial advisors of such parties who have a need to know such
information solely for purposes of assisting the parties in evaluating and
negotiating the matters contemplated herein.
6. Conditions to Close. The closing of the Series B Preferred Stock
-------------------
Financing and the sale of shares by The Scott A. Blum Separate Property Trust
(the "Blum Sales") and the receipt of the purchase price for such shares shall
be a condition to Buy.Com's obligation to close the joint venture transactions
referenced in this Agreement.
7. Termination and Break Up Fee. This Agreement shall terminate upon the
----------------------------
occurrence of either of the following:
(a) At the election of Buy.Com, in the event the Series B Preferred Stock
Financing and the Blum Sales have not closed prior to September 30, 1999,
provided that if the sole reason for the failure to close the Series B Preferred
Stock Financing and Blum Sales is due to the requirement to comply with the Hart
Scott Rodino Antitrust Improvements Act of 1976, such closing date deadline
shall be extended until the waiting period has expired or been terminated, or
(b) At the election of Buy.Com or SoftBank if such other party has failed
to comply with the terms of this Agreement, and has failed to cure such default
within thirty (30) days notice of such default by the non-breaching party.
(c) At the election of either party with respect to any of the three joint
ventures for which the parties have not executed and delivered definitive joint
venture documents within six (6) months of the date hereof with respect to the
Buy.Com Europe and Buy.Com UK and nine (9) months of the date hereof with
respect to Buy.Com Japan.
In the event this Agreement is terminated (i) pursuant to Section 7(b)
above as a result of a breach of this Agreement by a party or (ii) pursuant to
Section 7(c) above as a result of the bad faith actions of a party (in either
event such party at fault shall be a "breaching party"), such breaching party
shall pay to the non-breaching party a termination fee of One Million Dollars
(US$1,000,000). Sections 5, 9 and 11 will survive the termination of this
Agreement.
<PAGE>
Softbank
September 2, 1999
Page 3
8. Effect of Agreement. This Agreement is intended to be a binding
-------------------
agreement of the parties hereto, effective and enforceable by the parties. By
SoftBank's signature hereto, SoftBank represents it has the authority to bind
itself and the SoftBank affiliates referenced in this Agreement. The Term
Sheets are incorporated into this Agreement and set forth the parties' intent
for the structure, terms and conditions of the respective joint ventures. The
definitive joint venture documents for each joint venture will contain
additional terms and conditions customary for transactions of this type.
9. Expenses. Each party will bear all fees and expenses incurred by it or
--------
on its behalf in connection with the matters set forth herein (including,
without limitation, the fees and expenses of attorneys, accountants,
consultants, lenders and other advisors).
10. Notices. All notices and other communications hereunder will be in
-------
writing and will be furnished by hand delivery (including recognized overnight
courier) or facsimile to the parties at the addresses set forth below. Any such
notice will be deemed duly given upon the date it is delivered to the address
shown below, addressed as follows:
If to Buy.Com:
Buy.Com Inc.
21 Brookline
Aliso Viejo, California 92656
Attention: Chief Executive Officer
Facsimile: (949) 425-5320
With a copy to:
Brobeck, Phleger & Harrison LLP
38 Technology Drive
Irvine, California 92618-6301
Attention: Keven F. Baxter, Esq.
Facsimile: (949) 790-6301
If to SoftBank:
SOFTBANK America Inc.
300 Delaware Ave.
Suite 909
Wilmington, DE 19801
Attention: Francis B. Jacobs II
Facsimile: (302) 552-3128
<PAGE>
Softbank
September 2, 1999
Page 4
With a copy to:
Sullivan & Cromwell
1888 Century Park East
Suite 2100
Los Angeles, CA 90067
Attention: John L. Savva, Esq.
Facsimile: (310) 712-8800
The addresses set forth above may be changed by any party upon furnishing to the
other parties a notice of change of address in accordance with the terms of this
paragraph.
11. Miscellaneous. This Agreement is governed by California law, without
-------------
regard to its choice of law rules. The parties expressly waive the application
of the United Nations Convention on Contracts for the International Sale of
Goods to the terms of this Agreement. The sole jurisdiction and venue for
actions related to the subject matter hereof shall be the state and federal
courts in Orange County, California. The official language for purposes
of this Agreement, the definitive joint venture documents and all notices and
communications hereunder and thereunder shall be English. This Agreement
constitutes the complete and exclusive agreement between the parties with
respect to the subject matter hereof, superseding and replacing any and all
prior or contemporaneous agreements, communications, and understanding (whether
written or oral) regarding such subject matter. This Agreement may only be
modified, or any rights under it waived, by a written document executed by all
of the parties, provided that the terms of each of the joint ventures may be
amended by the written consent of Buy.Com and the particular SoftBank entity
participating in such joint venture. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which the party may be
entitled.
If you are in agreement with the foregoing, please sign in the space
provided below and return a copy of this letter to the undersigned.
Very truly yours,
BUY.COM INC.
By:_________________________________
Gregory J. Hawkins
Chief Executive Officer
<PAGE>
Softbank
September 2, 1999
Page 5
ACCEPTED and AGREED:
SOFTBANK AMERICA, INC.
By:_________________________
Name:_______________________
Title:______________________
<PAGE>
EXHIBIT A
---------
TERM SHEET
for
BUY.COM EUROPE
<PAGE>
TERM SHEET
FOR
BUY.COM EUROPE JOINT VENTURE
Purpose of Joint Venture: BUY.COM INC. ("Buy.Com") and SOFTBANK America
Inc. ("SoftBank") will form a joint venture
("Buy.Com Europe") to launch and operate an
Internet superstore in the countries and
territories listed below.
Territory Covered: The countries comprising the European Union,
Switzerland, all European countries east to the
Russian border (exclusive of Russia), all
European countries south to Greece (inclusive of
Greece), but excluding the United Kingdom,
Ireland, the Middle East and Africa (the
"Territory").
Launch Priority: It is anticipated that Buy.Com Europe will
prioritize the countries in which it launches the
Buy.Com Internet superstore concept as follows:
First Stage: Germany, France
Second Stage: Benelux, Scandinavia
Third Stage: Italy, Spain
Future Stages: To be determined by the
Buy.Com Europe Board
Ownership and Structure: Buy.Com Europe will be owned as follows:
50% Buy.Com
50% SOFTBANK America Inc.
The legal and tax structure of Buy.Com Europe
will be determined by Buy.Com and SoftBank in
consultation with their tax, legal and accounting
advisors. It is understood that the objective is
for Buy.Com to be able to consolidate the
financial statements of Buy.Com Europe into
Buy.Com until Buy.Com Europe completes an IPO.
Buy.Com Europe will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of Buy.Com
Europe. The stock and option grants will be
subject to customary [***]. Any modifications to
---
such vesting schedule shall be at the discretion
of the Buy.Com Europe Board on a case by case
basis.
______________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
Initial Funding of The initial funding of U.S. $8.2 million which
Buy.Com Europe: is intended to provide adequate working capital
through June 2000, will be provided entirely by
SoftBank as follows:
$2.73 million equity contribution from
SoftBank
$2.73 million working capital cash loan from
SoftBank to Buy.Com Europe.
$2.73 million equity contribution from
Buy.Com (which amount will be funded by
SoftBank as a loan to Buy.Com such that
Buy.Com receives credit for such capital
contribution on the books of Buy.Com Europe.
The loan from SoftBank to Buy.Com will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year
term with an acceleration clause for immediate
payment within ten (10) days of the closing of
Buy.Com's IPO.
The loan from Softbank to Buy.Com Europe will
accrue interest at the lowest rate required to
avoid the imputation of interest and will have a
5 year term with an acceleration clause for
immediate payment within ten (10) days of the
closing of Buy.Com Europe's IPO.
Ongoing Funding of Buy.Com On an annual basis, management of Buy.Com Europe
Europe: will prepare a Business Plan and Budget for
Buy.Com Europe for review and approval by the
Buy.Com Europe Board. Ongoing funding will be
obtained by additional pro rata investments by
Buy.Com and SoftBank or new third party
investments on terms approved by the Buy.Com
Europe Board. Any new third party investments
will dilute all shareholders pro-rata based on
their respective percentage ownership interests
on the date of such investment.
Preemptive Right: Buy.Com and SoftBank will have a right to
participate in any future financing to maintain
their pro rata ownership in Buy.Com Europe
subject to certain customary exceptions to be
included in the definitive joint venture
documents. This right will terminate upon an IPO
of Buy.Com Europe.
2
<PAGE>
Governance: Buy.Com Europe will have a Board of Directors of
[***] members initially with Buy.Com designating
---
[***] members [***] and SoftBank designating
--- ---
[***] members. The parties will enter into a
---
voting agreement to maintain the Board
composition which agreement will terminate upon
an IPO of Buy.Com Europe.
Buy.Com's CEO, Greg Hawkins, will serve as
Chairman of Buy.Com Europe. The CEO or Managing
Director of Buy.Com Europe will serve as one of
the [***] designees of Buy.Com on the Board of
---
Buy.Com Europe and such individual will report to
Mr. Hawkins.
Buy.Com and SoftBank will mutually recruit and
select a CEO and other senior management for
Buy.Com Europe.
Intellectual Property Buy.Com will license its e-commerce technology to
Buy.Com Europe on a royalty free basis for use in
the Territory. Buy.Com will retain ownership of
its trade name, brand and all trademark and
service marks and other intellectual property
rights relating thereto and will license its name
and its other intellectual property rights
necessary and applicable to the business of
Buy.Com Europe on a royalty free basis and on
such other terms to be established in the
definitive joint venture documents. These
licenses will be perpetual subject to certain
limitations to be provided for in the definitive
joint venture documents.
Buy.Com will receive a royalty free, perpetual
grant back license to all technology developed by
Buy.Com Europe.
Service Fees: If either Buy.Com or SoftBank provides services
to Buy.Com Europe, Buy.Com Europe shall reimburse
such costs on an allocated basis and pay a
service fee to such party, provided that the
party providing such services will submit a
written proposal of such services and fees for
approval by a majority of the disinterested
Buy.Com Europe Board.
Co-Promotion and Cross Buy.Com and SoftBank will discuss and negotiate
Marketing Opportunities: co-promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
______________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
3
<PAGE>
Admission of Additional Buy.Com Europe will not issue ownership interest
Partners: to a competitor of Buy.Com without the prior
written consent of Buy.Com.
Co-Sale and Right of First Each of Buy.Com and SoftBank will have a co-sale
Refusal Provisions right and right of first refusal over the other
partner's shares or other ownership interest in
Buy.Com Europe, excluding transfers to
affiliates. This agreement will terminate upon an
IPO of Buy.Com Europe.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation
of the joint venture documents.
BUY.COM INC.
By:___________________________________
Name:_________________________________
Title:________________________________
SOFTBANK America Inc.
By:___________________________________
Name:_________________________________
Title:________________________________
4
<PAGE>
EXHIBIT B
---------
TERM SHEET
for
BUY.COM UK
<PAGE>
TERM SHEET
FOR
BUY.COM UK JOINT VENTURE
Purpose of Joint Venture: BUY.COM INC. ("Buy.Com") and eVentures, a joint
venture between SOFTBANK and ePartners Capital Ltd.
(collectively, "eVentures") will form a joint
venture ("Buy.Com UK") to launch and operate an
Internet superstore in the countries and territories
listed below.
Territory Covered: The countries include the United Kingdom, Australia,
New Zealand and India (the "Territory").
Launch Priority: It is anticipated that Buy.Com UK will prioritize
the countries in which it launches the Buy.Com
Internet superstore concept as follows:
First Stage: United Kingdom
Second Stage: Australia
Third Stage: New Zealand
Future Stages: To be determined by the Buy.Com UK
Board
Ownership and Buy.Com UK will be owned as follows:
Structure:
50% Buy.Com
50% eVentures
[CAPTION]
The legal and tax structure of Buy.Com UK will be
determined by Buy.Com and eVentures in consultation
with their tax, legal and accounting advisors. It is
understood that the objective is for Buy.Com to be
able to consolidate the financial statements of
Buy.Com UK into Buy.Com until Buy.Com UK completes
an IPO.
Buy.Com UK will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of Buy.Com UK.
The stock and option grants will be subject to
customary [***]. Any modifications to such vesting
---
schedule shall be at the discretion of the Buy.Com
UK Board on a case by case basis.
Initial Funding of The initial funding of U.S. $6 million which is
Buy.Com UK: intended to provide adequate working capital through
June 2000, will be provided entirely by Softbank
and/or eVentures as follows:
$2 million equity contribution from
Softbank/eVentures
__________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
$2 million working capital cash loan from Softbank
to Buy.Com UK. $2 million equity contribution from
Buy.Com (which amount will be funded by Softbank
as a loan to Buy.Com such that Buy.Com receives
credit for such capital contribution on the books
of Buy.Com UK).
The loan from Softbank to Buy.Com will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of Buy.Com's
IPO.
The loan from Softbank to Buy.Com UK will accrue
[***].
---
Ongoing Funding of On an annual basis, management of Buy.Com UK will
Buy.Com UK: prepare a Business Plan and Budget for Buy.Com UK
for review and approval by the Buy.Com UK Board.
Ongoing funding will be obtained by additional pro
rata investments by Buy.Com and eVentures or new
third party investments on terms approved by the
Buy.Com UK Board. Any new third party investments
will dilute all shareholders pro-rata based on their
respective percentage ownership interests on the
date of such investment.
Preemptive Right: Buy.Com and eVentures will have a right to
participate in any future financing to maintain
their pro rata ownership in Buy.Com UK subject to
certain customary exceptions to be included in the
definitive joint venture documents. This right will
terminate upon an IPO of Buy.Com UK.
Governance: Buy.Com UK will have a Board of Directors of [***]
---
members initially with Buy.Com designating [***]
---
members (one of which will be the CEO or Managing
Director of Buy.Com UK) and eVentures designating
[***] members. The parties will enter into a voting
---
agreement to maintain the Board composition which
agreement will terminate upon an IPO of Buy.Com UK.
Buy.Com's CEO, Greg Hawkins, will serve as Chairman
of Buy.Com UK. The CEO or Managing Director of
Buy.Com UK will serve as one of the [***] designees
---
of Buy.Com on the Board of Buy.Com UK and such
individual will report to Mr. Hawkins.
Buy.Com and eVentures will mutually recruit and
select a CEO and other senior management for Buy.Com
UK.
________________________________________________________________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
<PAGE>
Intellectual Property: Buy.Com will license its e-commerce technology to
Buy.Com UK on a royalty free basis for use in the
Territory. Buy.Com will retain ownership of its
trade name, brand and all trademark and service
marks and other intellectual property rights
relating thereto and will license its name and its
other intellectual property rights necessary and
applicable to the business of Buy.Com UK on a
royalty free basis and on such other terms to be
established in the definitive joint venture
documents. These licenses will be perpetual subject
to certain limitations to be provided for in the
definitive joint venture documents.
Buy.Com will receive a royalty free, perpetual grant
back license to all technology developed by Buy.Com
UK.
Service Fees: If either Buy.Com or eVentures provides services to
Buy.Com UK, Buy.Com UK shall reimburse such costs on
an allocated basis and pay a service fee to such
party, provided that the party providing such
services will submit a written proposal of such
services and fees for approval by a majority of the
disinterested Buy.Com UK Board.
Co-Promotion and Cross Buy.Com and eVentures shall discuss and negotiate
Marketing Opportunities: co-promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
Admission of Additional Buy.Com UK will not issue ownership interest to a
Partners: competitor of Buy.Com without the prior written
consent of Buy.Com.
Co-Sale and Right of Each of Buy.Com and eVentures will have a co-sale
First Refusal Provisions: right and right of first refusal over the other
partner's shares or other ownership interest in
Buy.Com UK, excluding transfers to affiliates. This
agreement will terminate upon an IPO of Buy.Com UK.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation of
the joint venture documents.
BUY.COM INC.
By: ______________________________
Name: ____________________________
Title: ___________________________
eVentures
By: ______________________________
Name: ____________________________
Title: ___________________________
3
<PAGE>
EXHIBIT C
---------
TERM SHEET
for
BUY.COM JAPAN
<PAGE>
TERM SHEET
FOR
BUY.COM JAPAN JOINT VENTURE
Purpose of Joint Venture: BUY.COM INC. ("Buy.Com") and SOFTBANK America, Inc.
("Softbank") will form a joint venture ("Buy.Com
Japan") to launch and operate an Internet superstore
in Japan.
Territory Covered: The countries include Japan (the "Territory").
Launch Priority: It is anticipated that Buy.Com Japan will prioritize
the countries in which it launches the Buy.Com
Internet superstore concept as follows:
First Stage: Japan
Ownership and Structure: Buy.Com Japan will be owned as follows:
50% Buy.Com
50% Softbank
The legal and tax structure of Buy.Com Japan will be
determined by Buy.Com and Softbank in consultation
with their tax, legal and accounting advisors. It is
understood that the objective is for Buy.Com to be
able to consolidate the financial statements of
Buy.Com Japan into Buy.Com until Buy.Com Japan
completes an IPO.
Buy.Com Japan will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of Buy.Com Japan.
The stock and option grants will be subject to
customary [***]. Any modifications to such vesting
---
schedule shall be at the discretion of the Buy.Com
Japan Board on a case by case basis.
Initial Funding of The initial funding of U.S. $9 million which is
Buy.Com Europe: intended to provide adequate working capital through
June 2000, will be provided entirely by Softbank as
follows:
$3 million equity contribution from Softbank
$3 million working capital cash loan from
Softbank to Buy.Com Japan.
$3 million equity contribution from Buy.Com
(which amount will be funded by Softbank
as a loan to Buy.Com such that
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
Buy.Com receives credit for such capital
contribution on the books of Buy.Com Japan).
The loan from Softbank to Buy.Com will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of Buy.Com's
IPO.
The loan from Softbank to Buy.Com Japan will accrue
interest at the [***].
Ongoing Funding of On an annual basis, management of Buy.Com Japan will
Buy.Com Europe: prepare a Business Plan and Budget for Buy.Com Japan
for review and approval by the Buy.Com Japan Board.
Ongoing funding will be obtained by additional pro
rata investments by Buy.Com and Softbank or new
third party investments on terms approved by the
Buy.Com Japan Board. Any new third party investments
will dilute all shareholders pro-rata based on their
respective percentage ownership interests on the
date of such investment.
Preemptive Right: Buy.Com and Softbank will have a right to
participate in any future financing to maintain
their pro rata ownership in Buy.Com Japan subject to
certain customary exceptions to be included in the
definitive joint venture documents. This right will
terminate upon an IPO of Buy.Com Japan.
Governance: Buy.Com Japan will have a Board of Directors of
[***] members initially with Buy.Com designating
---
[***] members (one of which will be the CEO or
---
Managing Director of Buy.Com Japan) and Softbank
designating [***] members. The parties will enter
---
into a voting agreement to maintain the Board
composition which agreement will terminate upon an
IPO of Buy.Com Japan.
Buy.Com's CEO, Greg Hawkins, will serve as Chairman
of Buy.Com Japan. The CEO or Managing Director of
Buy.Com Japan will serve as one of the [***]
designees of Buy.Com on the Board of Buy.Com Japan
and such individual will report to Mr. Hawkins.
Buy.Com and Softbank will mutually recruit and
select a CEO and other senior management for Buy.Com
Japan.
Intellectual Buy.Com will license its e-commerce technology to
Buy.Com Japan
_______________________________________________________________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
<PAGE>
Property on a royalty free basis for use in the Territory.
Buy.Com will retain ownership of its trade name,
brand, and all trademark and service marks and other
intellectual property rights relating thereto and
will license its name and its other intellectual
property rights necessary and applicable to the
business of Buy.Com Japan on a royalty free basis
and on such other terms to be established in the
definitive joint venture documents. These licenses
will be perpetual subject to certain limitations to
be provided for in the definitive joint venture
documents.
Buy.Com will receive a royalty free, perpetual grant
back license to all technology developed by Buy.Com
Japan.
Service Fees: If either Buy.Com or Softbank provides services to
Buy.Com Japan, Buy.Com Japan shall reimburse such
costs on an allocated basis and pay a service fee to
such party, provided that the party providing such
services will submit a written proposal of such
services and fees for approval by a majority of the
disinterested Buy.Com Japan Board.
Co-Promotion and Cross Buy.Com and Softbank will discuss and negotiate co-
Marketing Opportunities: promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
Admission of Additional Buy.Com Japan will not issue ownership interest to a
Partners: competitor of Buy.Com without the prior written
consent of Buy.Com.
Co-Sale and Right of Each of Buy.Com and Softbank will have a co-sale
First Refusal Provisions right and right of first refusal over the other
partner's shares or other ownership interest in
Buy.Com Japan, excluding transfers to affiliates.
This agreement will terminate upon an IPO of Buy.Com
Japan.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation of
the joint venture documents.
BUY.COM INC.
By:________________________________
Name:______________________________
Title:_____________________________
SOFTBANK AMERICA, INC.
By:________________________________
Name:______________________________
Title:_____________________________
3
<PAGE>
EXHIBIT 10.36
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Agreement
This Agreement ("Agreement") is by and between BuyGolf.com, Inc., a Delaware
corporation ("BuyGolf"), with its principal place of business at 1705 S. Coast
Highway, Suite D, Laguna Beach, California 92651 and Las Vegas Golf & Tennis,
Inc., a Nevada corporation ("LVG") with its principal place of business at 2701
Crimson Canyon Drive, Las Vegas, Nevada 89128.
1. Purpose
The purpose of this Agreement is to provide the terms and conditions for
the purchase and resale by BuyGolf and LVG of various golf equipment,
accessories and related golf merchandise ("Product").
2. Terms of Sale
A. All Product sales will be subject to LVG's then-current [***] as
---
maintained in its inventory control and point of sale software system
("POS") at the time of purchase ("[***]").
---
B. BuyGolf agrees to name LVG as BuyGolf's Primary Distribution Source
("Primary Source"). As Primary Source, LVG will be BuyGolf's first contact
and, subject to Product availability, source for [***] BuyGolf's Product
---
needs.
C. LVG and BuyGolf will work toward the implementation of LVG's
Distribution Systems interface ("IMDSI") which provides real-time pricing
and availability.
3. Ordering
A. BuyGolf will compile, update and provide LVG with Product order
information. The Product order information will include the (i) Product
type(s) by LVG's department codes, (ii) unit quantity, (iii) LVG SKU
number, (iv) BuyGolf's resale price, and (v) correct shipping address.
BuyGolf personnel will identify for each Product order, the ship-to
destination as either BuyGolf, BuyGolf's customer, or to some other
specified third party. LVG will, subject to Product availability, use its
best efforts to fill and ship all Product orders placed by BuyGolf within
[***] of order receipt.
---
B. For government orders, BuyGolf will compile, update, and provide LVG
with the following Product order information: (1) Product type(s) by LVG's
department codes, (ii) unit quantity, (iii) end user name and zip code, and
(iv) government contract number. BuyGolf personnel will identify, for each
Product order, the ship-to destination as either BuyGolf, BuyGolf's
customer, or to some other specified third party. LVG will, subject to
Product availability, use its best efforts to fill and ship all Product
orders placed by BuyGolf with [***] of order receipt.
---
____________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
<PAGE>
C. LVG will accept orders, via facsimile, and via LVG and BuyGolf approved
electronic ordering methods only from those who identify themselves as
BuyGolf personnel and provide the LVG customer number prior to placing the
order. LVG will have no obligation to confirm the validity of any order
placed or the authority of the person placing an order in this manner.
BuyGolf will disclose its LVG customer number only to its personnel with a
need to know.
4. Pricing and Payment Terms
A. All Product prices will be at the [***] as shown in LVG's online POS
---
system as of the date of order, plus [***] to LVG.
---
B. As LVG's [***] change, LVG's price to BuyGolf shall be adjusted to
---
reflect such changes. BuyGolf shall have reasonable rights to audit
LVG's books and records to verify LVG's [***], on reasonable notice,
---
and at BuyGolf's sole expense.
C. If any manufacturer/publisher has agreed to make [***] to BuyGolf for
---
Products sold by LVG ("[***]") and upon LVG's approval, then LVG shall
---
pass through such [***] to BuyGolf via a credit memo. [***]
--- ---
opportunities are subject to LVG's available on-hand inventory. LVG
shall employ its best efforts to calculate such [***] for sales to
---
BuyGolf, and to pass through any such credits to BuyGolf within [***]
---
days of LVG's receipt of any such rebate or recognition of any such
discount.
D. LVG will invoice BuyGolf on the first and the sixteenth of each
calendar month and all Invoices will be due and payable net [***] from
---
invoice date.
5. Fees
LVG shall receive [***] per order, as and for the cost of its packaging
---
materials, which costs may be reviewed and adjusted by the parties hereto
on a quarterly basis.
6. Shipping
A. All orders will be shipped FOB origin, BuyGolf's carrier of choice,
with all ground freight charges for Product orders paid by [***]. In the
---
event an authorized BuyGolf representative requests a priority shipping
method, BuyGolf agrees to use an LVG authorized carrier and to [***].
---
B. LVG will ship orders directly to BuyGolf's customers upon BuyGolf's
request.
________________________________
[***] Confidential treatment has been requested for the bracketed portions. The
---
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
<PAGE>
7. Returns
A. All returns must be accompanied by a valid BuyGolf return authorization
("RA") number. Each return must be packaged separately for each RA and
contain only Product specified on that RA.
B. Defective Products - In accordance with manufacturers warranties,
------------------
BuyGolf may return to LVG for replacement or credit, any defective Product.
C. Unauthorized Returns - Any Product not authorized for return by BuyGolf
--------------------
and not prominently marked with the RA number on the shipping carton shall
be designated as an Unauthorized Return ("UR"). LVG shall refuse delivery of
all UR.
D. Mislabeled Returns - Mislabeled Returns ("MR") shall include by way of
------------------
example only, Product returned that as new Product is not in a resalable
condition, or Product returned as defective that is not a fact defective.
Any MR received by LVG will be assigned a value by LVG in the exercise of
its discretion. That Value shall be promptly communicated to BuyGolf in
writing, together with the RA number accompanying any such MR Product.
BuyGolf shall have the sole responsibility of resolving any such dispute
with its customer. Within ninety days of delivery of the advice of value and
RA number to BuyGolf, BuyGolf shall advise LVG as to whether to reship the
MR Product at BuyGolf's expense or whether BuyGolf will accept the assigned
value as a credit on its account with LVG. Absent any instructions from
BuyGolf in such ninety (90) days, LVG shall apply a credit to BuyGolf's
account for the assigned value, which credit shall be deemed final and LVG
shall be free to dispose of the MR Product as LVG deems appropriate. LVG
will not be responsible for loss of or damage to MR Product pending said
ninety days.
E. In the event of return of Product and replacement at BuyGolf's request,
[***], and shall be entitled to any shipping costs paid by the manufacturer
---
of the Product, if any.
F. LVG reserves the right to change its return policies as stated herein
without notice upon notification from manufacturers or vendors of changes in
their returns policies.
8. Reconciliation
Both parties mutually agree to reconcile BuyGolf's account every [***]. In
---
order to allow appropriate credits to be applied, BuyGolf agrees to provide
appropriate documentation to LVG and wait [***] from disputed claim before
---
debiting LVG for any reason.
9. Marketing Funds
LVG will pass through, in the form of a credit memo, [***] provided by
---
vendors for BuyGolf provided BuyGolf provides LVG with the necessary
contract authorizing LVG
________________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The redacted portion has been omitted and filed separately with
Securities and Exchange Commission.
3
<PAGE>
to deduct the funds from the vendor. BuyGolf will
provide marketing claims or Invoice to LVG within [***] of activity along
---
with a copy of the proof of performance if applicable.
10. Shares of Stock of BuyGolf
In consideration of the pricing provisions of this Agreement, together with
other good and valuable consideration, and upon commencement hereof,
BuyGolf shall deliver to LVG a common stock certificate for the number of
shares of BuyGolf's common stock equal to [***]% of BuyGolf's authorized
---
and issued shares of common stock outstanding on the effective date of this
Agreement. So long as LVG holds said shares of BuyGolf's common stock, LVG
shall be entitled to designate a person to serve as one member of BuyGolf's
board of directors and hereby designates Thomas E. Hurford. BuyGolf shall
take all required action to amend its Articles of Incorporation and/or
Bylaws to provide adequate assurance that LVG will maintain the right to
designate the person to serve as such a member of BuyGolf's board of
directors. LVG's right to designate such a director shall terminate upon
the termination date of this Agreement, if any.
11. Terms and Termination
This Agreement will commence on the date of the last signature set forth
below and will continue for one (1) year. Either party may terminate this
Agreement without cause by giving sixty (60) days advance written notice to
the other party. LVG may terminate this Agreement immediately for cause
upon written notice, which notice will include a ten (10) day opportunity
to cure.
12. Confidentiality
Both parties agree that they will not disclose to third parties
Confidential Information, proprietary information and/or trade secrets, to
include BuyGolf customer information, of the other which is not in the
public domain, without the others' prior written permission.
A. Confidential Information will only be used by the parties in furtherance
of this business relationship.
B. LVG represents and warrants that it will not use BuyGolf's Confidential
Information to solicit or develop business directly with BuyGolf's
customers.
13. Notices
All notices and other communications relating to this Agreement or its
terms will be in writing and mailed via first class United States Postal
Service, certified or registered with return receipt requested or via
facsimile. All notices so mailed will be deemed received two (2) days
after postmark date and facsimiles will be deemed received upon
notification of successful transmission.
__________________________
[***] Confidential treatment has been requested for the bracketed portions. The
---
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
4
<PAGE>
14. Entire Agreement
This Agreement (including any Exhibits and Addenda) constitutes the entire
Agreement between the parties regarding the resale of Product, and will
cancel terminate and supersede any and all previous agreements, proposals,
representations, or statements, whether oral or written. The terms of this
Agreement will supersede the terms of any invoice or purchase order issued
by either party. Any modifications of this Agreement must be in writing
and signed by an authorized representative of each party.
15. Governing Law
This Agreement will be deemed made in the State of California and will be
governed by and construed in accordance with California laws, excluding its
conflicts or choice of law rule or principles which might refer to the law
of another jurisdiction. The state and federal courts situated in Orange
County, California will have non-exclusive jurisdiction and venue over any
dispute or controversy which arises out of this Agreement.
16. Headings
This Agreement may be executed in any number of original counterparts, each
of which when executed and delivered will be deemed to be an original and
all of which taken together will constitute but one and the same
instrument. Headings in this Agreement are included for convenience of
reference only and will not constitute a part of this Agreement for any
other purpose.
This Agreement will become effective as of the last date of signature by the
authorized parties below.
BuyGolf.com, Inc. Las Vegas Golf & Tennis, Inc.
By: /s/ Bradford Allen By: /s/ Tom Hurford
-------------------- -----------------
Name: Bradford Allen Name: Tom Hurford
------------------ ---------------
Title: President/CEO Title: President
----------------- --------------
Date: 5/3/99 Date: 5/3/99
------------------ ---------------
5
<PAGE>
First Amended Agreement
This First Amended Agreement ("Agreement") is made by and between BuyGolf.com,
Inc., a Delaware corporation ("BuyGolf"), with its principal place of business
at 1705 S. Coast Highway, Suite D, Laguna Beach, California 92651 and Las Vegas
Golf & Tennis, Inc., a Nevada corporation ("LVG") with its principal place of
business at 2701 Crimson Canyon Drive, Las Vegas, Nevada 89128.
1. Purpose
The purpose of this Agreement is to amend the terms and conditions of that
certain agreement by and between the parties hereto dated May 3, 1999 for
the purchase and resale by BuyGolf and LVG of various golf and tennis
equipment, accessories and related merchandise and all other merchandise
that LVG sells ("Product"). The foregoing notwithstanding, the term
"Product shall not include any proprietary Product bearing LVG's trade
names or marks, including by way of example only, Vision Golf(R).
2. Terms of Sale
A. All Product sales will be subject to LVG's then-current [***] as
---
maintained in its inventory control and point of sale software system
("POS") at the time of purchase ("[***]").
---
B. BuyGolf agrees to name LVG as BuyGolf's Primary Distribution Source
("Primary Source"). As Primary Source LVG will be BuyGolf's first contact,
subject to Product availability, for [***] BuyGolf's Product needs.
---
C. LVG and BuyGolf will work toward the implementation of LVG's
Distribution Systems interface ("IMDSI") which provides real-time pricing
and availability.
3. Ordering
A. BuyGolf will compile, update, and provide LVG with Product order
information. The Product order information will include the (i) Product
types(s) by LVG's department codes, (ii) unit quantity, (iii) LVG SKU
number, (iv) BuyGolf's resale price, and (v) correct shipping address.
BuyGolf personnel will identify for each Product order, the ship-to
destination as either BuyGolf, BuyGolf's customer, or to some other
specified third party. LVG will, subject to Product availability, use its
best efforts to fill and ship all Product orders placed by BuyGolf within
[***] of order receipt.
---
B. For government orders, BuyGolf will compile, update, and provide LVG
with the following Product order information: (i) Product type(s) by LVG's
department codes, (ii) unit quantity, (iii) end user name and zip code, and
(iv) government contract number. BuyGolf personnel will identify, for each
Product order, the ship-to destination as either
__________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Comission.
1
<PAGE>
BuyGolf, BuyGolf's customer, or to some other specified third party. LVG
will, subject to Product availability, use its best efforts to fill and
ship all Product orders placed by BuyGolf within [***] of order receipt.
C. LVG will accept orders, via facsimile, and via LVG and BuyGolf
approved electronic ordering methods only from those who identify
themselves as BuyGolf personnel and provide the LVG customer number prior
to placing the order. LVG will have no obligation to confirm the validity
of any order placed or the authority of the person placing an order in this
manner. BuyGolf will disclose its LVG customer number only to its personnel
with a need to know.
4. Pricing and Payment Terms
A. All Product prices will be at the [***] as shown in LVG's online POS
---
system as of the date of order, plus [***] to LVG.
---
B. As LVG's [***] change, LVG's price to BuyGolf shall be adjusted to
---
reflect such changes. BuyGolf shall have reasonable rights to audit LVG's
books and records to verify LVG's [***], on reasonable notice, and at
---
BuyGolf's sole expense.
C. If any manufacturer/publisher has agreed to make available [***] to
---
BuyGolf for Products sold by LVG ("[***]") and upon LVG's approval, then
---
LVG shall pass through such [***] to BuyGolf via a credit memo. [***]
--- ---
opportunities are subject to LVG's available on-hand inventory. LVG shall
employ its best efforts to calculate such [***] for sales to BuyGolf, and
---
to pass through any such credits to BuyGolf within [***] days of LVG's
---
receipt of any such rebate or recognition of any such discount.
D. LVG will Invoice BuyGolf on the first and the sixteenth of each calendar
month and all Invoices will be due and payable net [***] from the invoice
---
date.
E. Beginning April 1, 2000 all Product prices will be at the [***] as shown
---
in LVG's on line POS system as of the date of order, plus the following
percentage:
-----------------------------------------------------------------------
Annual Sales Percentage
------------- -----------
-----------------------------------------------------------------------
[***] [***]%
--- ---
-----------------------------------------------------------------------
[***] [***]%
--- ---
-----------------------------------------------------------------------
[***] [***]%
--- ---
-----------------------------------------------------------------------
5. Shipping
A. All orders will be shipped FOB origin, BuyGolf's carrier of choice, with
all ground freight charges for Product orders paid by [***]. In the event
---
an authorized BuyGolf representative requests a priority shipping method,
BuyGolf agrees to use an LVG authorized carrier and to [***].
---
________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Comission.
2
<PAGE>
B. LVG will ship orders directly to BuyGolf's customers upon BuyGolf's
request.
6. Returns
A. All returns must be accompanied by a valid BuyGolf return authorization
("RA") number. Each return must be packaged separately for each RA and
contain only Product specified on that RA,
B. Defective Products - In accordance with manufacturer warranties, BuyGolf
------------------
may return to LVG for replacement or credit, any defective Product.
C. Unauthorized Returns - Any Product not authorized for return by BuyGolf
--------------------
and not prominently marked with the RA number on the shipping carton shall
be designated as an Unauthorized Return ("UR"). LVG shall refuse delivery
of all UR.
D. Mislabeled Returns - Mislabeled Returns ("MR") shall include by way of
------------------
example only, Product returned that as new Product is not in a resalable
condition, or Product returned as defective that is not in fact defective.
Any MR received by LVG will be assigned a value by LVG in the exercise of
its discretion. That Value shall be promptly communicated to BuyGolf in
writing, together with the RA number accompanying any such MR Product.
BuyGolf shall have the sole responsibility of resolving any such dispute
with its customer. Within ninety days of delivery of the advice of value
and RA number to BuyGolf, BuyGolf shall advise LVG as to whether to reship
the MR Product at BuyGolf's expense or whether BuyGolf will accept the
assigned value as a credit on its account with LVG. Absent any instructions
from BuyGolf in such ninety (90) days, LVG shall apply a credit to
BuyGolf's account for the assigned value, which credit shall be deemed
final and LVG shall be free to dispose of the MR Product as LVG deems
appropriate.
E. In the event of return of Product and replacement at BuyGolf's request,
BuyGolf or its customer shall pay all costs of shipping, and shall be
entitled to any shipping costs paid by the manufacturer of the Product, if
any.
F. LVG reserves the right to change its return policies as stated herein
without notice upon notification from manufacturers or vendors of changes
in their returns polices,
7. Reconciliation
Both parties mutually agree to reconcile BuyGolf's account every [***]. In
---
order to allow appropriate credits to be applied, BuyGolf agrees to provide
appropriate documentation to LVG and wait [***] from disputed claim before
---
debiting LVG for any reason.
- ----------------------------------
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
3
<PAGE>
8. Marketing Funds
LVG will pass through, in the form of a credit memo, [***] provided by
---
vendors for BuyGolf provided BuyGolf provides LVG with the necessary
contract authorizing LVG to deduct the funds from the vendor. BuyGolf will
provide marketing claims or invoice to LVG within [***] of activity along
---
with a copy of the proof of performance if applicable.
9. Shares of Stock of BuyGolf
In consideration of the pricing provisions of the original agreement,
together with other good and valuable consideration, and upon commencement
thereof, BuyGolf has delivered to LVG a common stock certificate for the
number of shares of BuyGolf's common stock equal to [***]% of BuyGolf's
---
authorized and issued shares of common stock outstanding on the effective
date of the original agreement. So long as LVG holds said shares of
BuyGolf's common stock, LVG shall be entitled to designate a person to
serve as one member of BuyGolf's board of directors and hereby designates
Thomas E. Hurford. BuyGolf shall take all required action to amend its
Articles of Incorporation and/or By Laws to provide adequate assurance that
LVG will maintain the right to designate the person to serve as such a
member of BuyGolf's board of directors. LVG's right to designate such a
director shall terminate upon the termination date of the original
agreement or upon the sale of BuyGolf's business, or substantially all of
it's assets, by merger, stock sale or other means.
10. Terms and Termination
This First Amended Agreement shall commence April 1, 2000 and shall be
effective until March 31, 2003. All terms and conditions contained in the
original agreement dated May 3, 1999 shall continue to be effective up to
and including March 31, 2000. LVG may terminate this Agreement immediately
in the event of a default in payments, upon written notice to the other
party, which notice will include a ten (10) day opportunity to cure. This
Agreement shall automatically renew for successive two year periods unless
notice is given by a party to the other within ninety (90) days of the
expiration of the then current term.
11. Confidentiality
Both parties agree that they will not disclose to third parties
Confidential information, proprietary information and/or trade secrets, to
include BuyGolf customer information, of the other which is not in the
public domain, without the others' prior written permission.
A. Confidential Information will only be used by the parties in furtherance
of this business relationship.
- -------------------------------
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
4
<PAGE>
B. LVG represents and warrants that it will not use BuyGolf's Confidential
Information to solicit or develop business directly with BuyGolf's
customers.
12. Notices
All notices and other communications relating to this Agreement or its
terms will be in writing and mailed via first class United States Postal
Service, certified or registered with return receipt requested or via
facsimile. All notices so mailed will be deemed received two (2) days
after postmark date and facsimiles will be deemed received upon
notification of successful transmission.
13. Entire Agreement
This Agreement (including any Exhibits and Addenda) constitutes the entire
Agreement between the parties regarding the resale of Product, and upon the
effective date will cancel terminate and supersede any and all previous
agreements, proposals, representations, or statements, whether oral or
written. The terms of this Agreement will supersede the terms of any
invoice or purchase order issued by either party. Any modifications of
this Agreement must be in writing and signed by an authorized
representative of each party.
14. Governing Law
This Agreement will be deemed made in the State of California and will be
governed by and construed in accordance with California laws, excluding its
conflicts or choice of law rule or principles which might refer to the law
of another jurisdiction. The state and federal courts situated in Orange
County, California will have non-exclusive jurisdiction and venue over any
dispute or controversy, which arise out of this Agreement,
15. Headings
This Agreement may be executed in any number of original counterparts, each
of which when executed and delivered will be deemed to be an original and
all of which taken together will constitute but one and the same
instrument. Headings in this Agreement are included for convenience of
reference only and will not constitute a part of this Agreement for any
other purpose.
16. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party, provided, however, either party may
assign this Agreement without such consent to (i) any person or entity that
acquires its business, or substantially all of its assets, by merger, stock
sale, or other means or, (ii) to a subsidiary or an affiliate which is at
least 50% owned and controlled by assignor. This Agreement will be binding
on and inure to the benefit of BuyGolf and LVG and their respective
permitted successors and permitted assigns.
5
<PAGE>
17. Exclusivity and Non-compete
LVG expressly warrants and agrees, during the term of this agreement, not
to provide fulfillment services to any persons or entities conducting
business on the internet (or conducting e-commerce) except for BuyGolf and
its affiliates or assigns. Further, LVG expressly warrants and agrees that
it will not, during the term of this Agreement, become an internet
competitor to BuyGolf, meaning LVG will not, directly or indirectly, offer
any of its Products for sale via the internet. The foregoing
notwithstanding, LVG shall only be entitled to sell proprietary Product
bearing LVG's trade name or marks, including by way of example only, Vision
Golf(R), to an internet retail enterprise that is licensed to use the LVG
trade name or marks in an internet retail enterprise.
This Agreement will become effective as of April 1, 2000.
BuyGolf.com, Inc. Las Vegas Golf & Tennis, Inc.
By: /s/ Bradford Allen By: /s/ Tom Hurford
------------------------------ -------------------------
Name: Bradford Allen Name: Tom Hurford
---------------------------- -----------------------
Title: President/CEO Title: President
--------------------------- ----------------------
Date: 9/11/99 Date: 9/10/99
---------------------------- -----------------------
6
<PAGE>
EXHIBIT 10.37
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
BUY.COM AND INGRAM BOOK GROUP
-----------------------------
MEMORANDUM OF UNDERSTANDING
---------------------------
GENERAL TERMS AND CONDITIONS
- ----------------------------
Parties
This Memorandum of Understanding is entered into among Buy.com Inc. ("Buy.com")
and Ingram Book Company ("IBC"), and Ingram Customer Systems Inc. ("ICS"),
collectively ("Ingram").
Internet Distribution Partner
Buy.com will be an Internet Distribution Partner ("IDP") of Ingram and will be
entitled to an IDP enhanced programs and services as outlined in this Agreement.
[***]
---
PURCHASE OF PRODUCT
- -------------------
Discounts and Pricing (Books)
All discounting will be based on publishers' suggested retail prices.
Some publishers establish a Freight-Pass-Through (FPT) price. The FPT price is
higher than the invoice price; this difference reflects the freight expense to
be "passed through" to the consumer. For all programs where Buy.com is eligible
to receive free freight, discounting will be based on the FPT suggested retail
price. For all programs where Buy.com bears the freight expense, discounting
will be based on the lower, or invoice, price.
Order type or program Trade Discount
- --------------------- --------------
Telephone and fax orders [***]
---
Electronic shopped orders [***]
---
The purchase discounts above are defined as "trade" discounts, and apply to
"trade-discounted" merchandise only; "short" and "long" discount merchandise
will receive earned discount as communicated through IBC's product information
vehicles and as indicated in the titles@ingram database.
Discounts and Pricing (exceptions)
Order type or program Trade Discount
- --------------------- --------------
Spoken Audio [***]
---
GreenLight [***]
---
Low Price Point [***]
---
Gifts [***] per standard terms
---
Music [***] per standard terms
---
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
Titles Unlimited
IBC will provide Titles Unlimited to Buy.com as an IDP for the first [***]
---
titles ordered. Titles unlimited is a service where IBC searches and attempts to
obtain books IBC does not stock and which are in-print books that are available
through normal wholesale channels in the United States. Multiple copies of one
title ordered at the same time will count as one title for purposes of meeting
the [***] total threshold. Thereafter, IBC may provide this service at a
---
commercially, reasonably established price.
Cooperative Advertising
IBC will solicit cooperative advertising funds from publishers on behalf of
Buy.com as an IDP. Both parties agree to use their best efforts to solicit
cooperative advertising funds at [***] of net purchases. [***] Net purchases for
the purposes of this Agreement means Buy.com purchases from IBC at cost less
returns at cost, and will be calculated on a cumulative year-to-date basis. On a
quarterly basis, IBC will submit a Co-op report to Buy.com detailing co-op
collected on its behalf and will pay to Buy.com any deficiency in the [***]
minimum within 30 days of the parties reaching agreement during the quarterly
reconciliation, provided that any amounts not in dispute shall be paid within
thirty (30) days of the end of the quarter.
Payment Terms
Net payment is due on the last day of each calendar month for shipments made
during the previous month. A [***] cash discount may be taken on payments
---
received by IBC on or before the 10th day of the following month. The cash
discount is calculated on gross invoice amount. Invoices for fees, handling
charges and freight are not eligible for cash discount.
Marketing Support
As an IDP Buy.com will receive support from IBC's marketing group through
identification of monthly-featured titles and identity of targeted best sellers.
Returnability
Merchandise shipped in error and damaged merchandise may be returned to IBC
within 30 days of shipment for full credit as a "hassle-free" return (defective
merchandise may be returned at any time).
All merchandise purchased from IBC is eligible for overstock return unless
designated non-returnable through IBC product information vehicles. To receive
credit, returned merchandise must be in resaleable condition, and must be
returnable to the publisher.
Resaleable condition shall include hard cover books with dust jackets that are
worn, shopworn or price-stickered; torn shrink wrap; slightly bent corner and/or
spine; imperfect books due to printer or binder's labor, books with author
autograph. Resaleable condition will exclude trade paperback books with store
stickers or sticker residue; faded covers; water damage; ink marks; cut marks;
very bent cover and/or spine; books with bent, crumpled or dirty pages; prepacks
or boxed sets with missing books, toys or audio; multimedia which has been
opened.
For all returned merchandise, credits will be applied to Buy.com's account
within thirty (30) days of receipt by IBC.
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
<PAGE>
Returns Credit
Buy.com may return up to [***] of all purchases on a penalty-free basis.
---
Returns in excess [***] will be credited at a [***] discount off of suggested
--- ---
retail price for trade-discounted books and purchase discount less [***] short
---
discount books.
Hassle-free returns (including defective merchandise) shall not count toward
this [***] return credit limit.
---
[***]
---
Quarterly Meetings
Buy.com and IBC will schedule quarterly meetings with Buy.com to discuss
outstanding business issues. Such meetings will be held on a rotating basis at
the offices of Buy.com and IBC, or such other location as the parties may
mutually agree.
Communications and Account Management Requirements
IBC agrees to conduct quarterly planning meetings with Buy.com to insure that it
carries sufficient inventories to meet Buy.com's inventory and replenishment
needs.
IBC will assign staff at appropriate levels of its organization to work with,
and on behalf of, Buy.com's staff. IBC's account team will be led at a Senior
Management level, and will provide the responsiveness and sense of urgency that
Buy.com's business requires.
As an IDP, IBC will additionally assign an Account Manager to assist Buy.com
with efficient flow of order management, advance ordering and back-order
research.
Buy.com will continue to provide the following financial information to IBC:
*Annual audited financial statements
*Quarterly balance sheets with year-to-date income statements
*Financial meetings, as necessary, with Financial and other Management.
Reporting Requirements
A variety of performance measurement and sales reports will be sent to Buy.com
on a regular, agreed-upon basis and as requested by Buy.com and where such
reports are able to be produced by Ingram.
DATABASE
- --------
Buy.com is granted a limited, non-exclusive non-transferable license solely to
use the Database as defined below, in the course of its business as a Web Store
on a single CPU computer system owned and operated by Buy.com utilizing the
World Wide Web service to sell books and book product. [***] Buyer shall
safeguard all information relating to the Database and will not sell, give,
lend, disclose, or otherwise make the software, including machine-readable
reproductions or any other forms thereof, available to others other than in the
course of its business as stated herein.
The Database is defined as: titles@ingram, images@ingram, table of
------------- -------------
contents@ingram, annotations@ingram, themes@ingram, family@ingram, first
- --------------- ------------------ ------------- -------------
chapter@ingram, publisher marketing@ingram, bibles@ingram, themes@ingram,
- -------------- ---------------- ------------- -------------
waves@SpringArbor, songs@SpringArbor and any
- ---------------- -----------------
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
3
<PAGE>
other @Ingram, @SpringArbor or other database that is developed and licensed
non-exclusively to others during the term of this agreement. See Exhibit A for a
summary description of the Database.
[***]
---
The Database shall at all times remain the property of ICS. Buy.com acknowledges
that ICS has proprietary rights in and retains title to the Database including
monthly update data, and that Buy.com acquires only the license to the Database
as set forth in this Agreement. The Database supplied by ICS is copyrighted by
ICS. This agreement limits the use of the Database to such hardware
configurations as are necessary to provide the services offered by the Buy.com
to its customers, including electronic bulletin board systems and the Internet
through on-line search and query systems as appropriate to encourage the resale
of book products in the Database. The license shall not include and expressly
prohibits the right to copy, distribute, or sell the Database or portions
thereof.
There are no warranties, expressed or implied, of the products or services
furnished under this license. ICS disclaims any implied warranty or
merchantability or fitness for a particular purpose. The Database is gathered
from many sources, so in some instances there may be inconsistencies in prices,
book types, abbreviations, publishers, series names or authors. The Database may
contain, as part of the title, codes meaningful to Ingram Book Group associates.
ICS disclaims the completeness or accuracy of the information contained within
the Database. ICS also disclaims any claims that the Database will be compatible
for use with any other software.
ICS shall provide telephone support during normal business hours in order to
document errors. ICS shall use its reasonable best efforts to promptly correct
any operational error or operational bug in the Database. At its option, but
without obligation to do so, ICS may furnish a new copy of a portion of the
Database that incorporates the fix as well as other enhancements. ICS does not
guarantee the effectiveness of efforts to fix errors and does not warrant that
all errors will be corrected.
Initial Public Offering
- -----------------------
[***]
---
MISCELLANOUS
- ------------
Term
This agreement sets forth the terms between the parties and is effective through
September 30, 2003.
Liability
Ingram and Buy.com will have no liability to the other under the terms of this
agreement, or for any alleged breach thereof, for indirect, punitive,
consequential, or special damages, including damages for lost profits.
Attorneys' Fees
If any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements, in addition to any other
relief to which the party may be entitled.
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
4
<PAGE>
Assignment
This Agreement may not be assigned by either party without the prior written
consent of the other party, provided, however, either party may assign this
Agreement without such consent to (i) any person or entity that acquires its
business or substantially all of its assets, by merger, stock sale, or other
means or, (ii) to a subsidiary or an affiliate which is at least 50% owned and
controlled by assignor. This Agreement will be binding on and inure to the
benefit of Buy.com, IBC, and ICS and their respective permitted successors and
permitted assigns.
Entire Agreement: Waiver. This agreement sets forth the entire understanding
of the parties with respect to the subject matters hereof. No modification or
amendment or waiver of any of the provisions of this agreement will be effective
unless in writing and signed by the parties affected.
Confidentiality Clause
IBC, ICS and Buy.com agree to keep the terms of this Agreement confidential.
Additionally, in performing its obligations under this Agreement, IBC, ICS or
buy.com may receive other confidential information about each other, which may
include but not limited to financial information, business plans, technical
data, and identity of Buy.com's customers. IBC, ICS and buy.com will respect
the confidentiality of such confidential information and will make no disclosure
thereof to third parties or use it for its own purposes, except upon written
permission of the disclosing party. This obligation does not apply to any
information, which is publicly available. IBC, ICS and Buy.com will cause its
employees to comply with this section. This Section will survive any
termination or expiration of this Agreement for a period of two years.
Notwithstanding the foregoing, a party shall have the right to disclose the
terms of this Agreement if upon the advice of its counsel, disclosure is
required pursuant to court order, applicable law, or regulatory authority.
However, the parties agree to use best reasonable efforts to limit disclosure
and will notify the other party prior to any disclosure. In the event of any
disclosure required or desired to be made to the Securities and Exchange
Commission ("SEC") with respect to this Agreement or the terms hereof, the
parties agree that Buy.com shall file a confidential treatment request with
respect thereto and that Ingram shall have the right to participate in the
drafting of, and any discussions or meetings with the SEC with respect to, such
request.
5
<PAGE>
Representations
- ---------------
Buy.com and IBC represent and warrant that they each have the authority to enter
into this Agreement and to perform their respective obligations hereunder. IBC
further represents and warrants that all new products sold hereunder are new and
of merchantable quality and that title to all products sold to Buy.com hereunder
will pass to Buy.com free and clear of all encumbrances or liens of any kind.
Accepted by:
_________________________________ _____________________________________
Buy.com Inc. Ingram Book Company
Print Name:______________________ Print Name:__________________________
_________________________________ _____________________________________
Title Title
_________________________________ _____________________________________
Date Date
_________________________________
Ingram Customer Systems Inc.
Print Name:______________________
_________________________________
Title
_________________________________
Date
6
<PAGE>
EXHIBIT 10.38
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
INGRAM FULFILLMENT SERVICES INC. AGREEMENT
This Fulfillment Services Agreement (the "Agreement") is made and
entered into as of October 8, 1999 between Buy.com Inc. ("Buy.com"), and INGRAM
FULFILLMENT SERVICES INC., ("IFSI").
A. Buy.com intends to maintain an electronic commerce site "Web
Store" on computer systems owned and operated by Buy.com
utilizing the World Wide Web service to sell various book
products (the "Products"). Products consist of items purchased by
Buy.com's customers from Buy.com's Web Store. Buy.com may also
seek fulfillment services under this Agreement for its customer
orders received from sources other than its Web Store.
B. IFSI is in the business of providing product shipping services of
the nature required by Buy.com.
C. Buy.com desires that IFSI provide, and IFSI is willing to provide
Buy.com, certain services on the terms and conditions set forth
herein.
AGREEMENT
In Consideration of the mutual agreements contained herein, the
parties agree as follows:
1. SERVICES TO BE RENDERED. Buy.com will be an Internet Distribution
-----------------------
Partner ("(DP") of IFSI and will receive IDP status as set forth in this
agreement. [***] IFSI agrees to process at its facilities ("Facility") Buy.com
---
customer orders for Products, which will include the following:
1.1 Packing. IFSI will carefully package Products in order to
-------
protect the Products against damage during shipment and to maintain the high
quality shopping image desired by Buy.com. IFSI will prepare gift-wrap Product
when the customer so requests at rates set forth in Section 2.1.
1.2 Shipping. IFSI will handle Product shipment including weighing,
--------
labeling, coding as to type of delivery services required and deliver items to,
or hold items for pickup by, carriers. IFSI will be the shipper of record for
freight purposes only. When the shipment has been manifested, IFSI will notify
Buy.com of the date and time of shipment, along with any assigned tracking
numbers. All Product orders to be shipped directly to Buy.com's customers will
be packaged with no reference to Ingram. Specifically, the packaging will not
display any Ingram trademark, service mark, logo or trade name. If the carrier
requires a return address, Ingram may use its warehouse address, without its
company name on such shipment. IFSI will create, at [***] to Buy.com, a custom
---
invoice with Buy.com's logo, product return and customer service information
printed on same. IFSI will not be liable for delivery or processing
___________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
delays beyond IFSI's control relating to such factors as weather, postal
strikes, transportation delays, Acts of God and other outside forces. IFSI will
be responsible for damage losses refunded by the carrier and reshipments due to
IFSI's error.
1.3 Inserts. IFSI will insert in shipments such literature as
-------
Buy.com may from time to time specify and provide to IFSI. The fee for standard
inserts, which is one piece no larger than an 8 1/2 by 11 sheet of paper, will
be [***] for set-up fee of each item and [***] per insertion. Non-standard
--- ---
inserts are quoted on an individual basis. IFSI will insert in Buy.com
shipments only material which has received prior written approval from Buy.com.
1.4 Order Status Research. When requested by Buy.com staff, IFSI will
---------------------
assist with researching the status of orders, including in the case of hold
orders, (when feature available), the expected shipping date; changes in status,
such as delivery address changes and the status of non-delivery problems.
2. COMPENSATION FOR SERVICES.
-------------------------
Amount of Compensation. In exchange for services rendered by IFSI
----------------------
pursuant to Section 1, Buy.com agrees to pay to IFSI the following compensation
on the following terms:
2.1 Invoicing. IFSI invoices will be generated weekly. Billing
---------
is 7-day terms.
Processing Charges. Buy.com will pay processing Book Company and
------------------
shipped by IFSI from the Facility. IFSI may change processing
charges after giving Buy.com ninety (90) days advance written
notice. [***] Gift Wrapping. Buy.com will pay IFSI [***] for each
--- ---
unit requiring gift-wrapping. This charge will include labor and
materials.
2.3 Charges for Certain Expenses. Buy.com will reimburse IFSI
----------------------------
for the following expense incurred by IFSI, but for no other expenses unless
agreed in writing by the parties.
Delivery Expense. Buy.com will reimburse IFSI for all carrier
----------------
costs (Delivery Expense) incurred by IFSI for shipping Product.
Buy.com's IDP rate will be at [***]
---
Outside Services. Outside services as agreed by both in writing
----------------
and purchased on behalf of and authorized by Buy.com and paid by
IFSI will be billed at actual cost.
___________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
2
<PAGE>
3. GENERAL RIGHTS AND OBLIGATIONS OF IFSI. In addition to the
--------------------------------------
rights and obligations of IFSI set forth elsewhere herein, IFSI will have the
following rights and obligations.
3.1 Service. IFSI will render the Services required hereunder
-------
in a professional manner and will provide all personnel and supplies necessary
to fulfill its obligations hereunder. As an IDP, Buy.com order cut-off times
for same day shipment will be the latest offered to any fulfillment client, and
as late as possible to meet IFSI's carrier pick-up schedules. [***]
---
3.2 Liability for Product Stored at IFSI Facility. IFSI will
---------------------------------------------
maintain and preserve the Products stored on its premises in as good a condition
as received. Further, IFSI will take all steps as may be reasonably necessary
to protect the Products stored at the Facility from damage or loss, including
without limitation, loss by theft, fire, water, or smoke, IFSI will be
responsible for and will insure all product losses while at the Facility.
3.3 Liability. Other than IFSI's replacement obligations under
---------
Section 1.2, neither Buy.com nor IFSI will have any liability to the other under
the terms of this Agreement, or for any alleged breach thereof, for indirect,
punitive, consequential, or special damages, including damages for lost profits.
3.4 Account Executive. IFSI will designate an individual who
-----------------
will be responsible for supervising all services rendered to Buy.com.
4. GENERAL RIGHTS AND OBLIGATIONS OF Buy.com. In addition to the
-----------------------------------------
rights and obligations of Buy.com set forth elsewhere herein, Buy.com will have
the following rights and obligations.
4.1 Owner and Seller of Products. Buy.com agrees to be the
----------------------------
owner and seller of the Products, including for sales and use tax purposes, and
will be responsible for reporting and remitting sales and use taxes to the
applicable authorities. In the event IFSI is considered the owner or seller of
the Products by taxing authorities, Buy.com will indemnify and reimburse IFSI
for any sales or use tax required to be paid by IFSI.
4.2 Returns Processing. Buy.com will handle returns processing
------------------
from Buy.com's customers.
4.3 Access to Premises. Buy.com, as its own expense, and its
------------------
authorized agents will have access to IFSI's premises during normal business
hours, for the purpose of reviewing order processing and fulfillment relating to
IFSI's services hereunder to Buy.com customers.
5. CONFIDENTIALITY. IFSI recognizes and acknowledges that the names
---------------
and addresses of Buy.com customers and information and records respecting
Buy.com or its customers maintained by IFSI are confidential and constitute
valuable and unique assets of
___________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
3
<PAGE>
Buy.com's business. IFSI will maintain such information as confidential. IFSI
and Buy.com agree to keep the terms of this Agreement confidential.
Additionally, in performing its obligations under this Agreement, IFSI or
Buy.com may receive other confidential information about the other party, which
may include but not be limited to financial information, business plans,
technical data, and identity of IFSI' Buy.coms. IFSI and Buy.com will respect
the confidentiality of such confidential information and will make no disclosure
thereof to third parties or use it for its own purposes, except upon written
permission of the disclosing party. This obligation does not apply to any
information, which is publicly available. IFSI and Buy.com will cause its
employees to comply with this section. This Section 5 will survive any
termination or expiration of this Agreement for a period of 2 years.
Notwithstanding the foregoing, a party shall have the right to
disclose the terms of this Agreement if upon the advice of its counsel,
disclosure is required pursuant to court order, applicable law, or regulatory
authority. However, the parties agree to use best reasonable efforts to limit
disclosure and will notify the other party prior to any disclosure. In the
event of any disclosure required or desired to be made to the Securities and
Exchange Commission ("SEC") with respect to this Agreement or the terms hereof,
the partners agree that Buy.com shall file a confidential treatment request with
respect thereto and that Ingram shall have the right to participate in the
drafting of, and any discussions or meetings with the SEC with respect to, such
request.
6. TRADE RIGHTS. All trade names, trademarks, copyrights, brand
------------
names, service marks or design ("Trade Rights") used by IFSI on behalf of
Buy.com during the term hereof are owned by Buy.com, and IFSI has and will
acquire no right or interest therein, except for such Trade Rights as are owned
by IFSI and used on behalf of Buy.com at Buy.com's request. Upon the
termination of the Agreement, IFSI will thereafter refrain from utilizing any of
Buy.com's Trade Rights for any purpose whatsoever. This section 6 will survive
any termination or expiration of this Agreement.
7. TERM. This Agreement will be effective on the date it is
----
executed by all parties and will remain in effect until September 30, 2003.
8. [***]
---
9. MISCELLANEOUS
-------------
9.1 Assignment Binding Effect. This Agreement may not be
-------------------------
assigned by either party without the prior written consent of the other party,
provided, however, either party may assign this Agreement without such consent
to (i) any person or entity that acquires its business or substantially all of
its assets, by merger, stock sale, or other means or, (ii) to a subsidiary or an
affiliate which is at least 50% owned and controlled by assignor. This
Agreement will be binding on and inure to the benefit of Buy.com and IFSI and
their respective permitted successors and permitted assigns.
_____________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
4
<PAGE>
9.2 Notices. All notices given the parties hereunder relation
-------
to the terms of this Agreement will be in writing or by telephone confirmed in
writing and will be personally delivered or mailed, by registered or certified
mail, return receipt requested postage prepaid or overnight delivery, addressed
to the respective parties at the addresses of such parties as specified below or
at such address as either party will designate in notice to the other. Notice
by telephone later confirmed promptly in writing will be deemed given at the
time of the telephone call. Send notifications to the following individuals for
communications concerning this Agreement, other than day-to-day business:
IFSI: Youngsuk Chi
Chairman of the Board & CEO
One Ingram Boulevard
P.0. Box 3006
La Vergne, TN 37086-1986
With copy to: General Counsel
Ingram Book Group Inc.
One Ingram Boulevard
P.0. Box 3006
La Vergne, TN 37086-1986
Buy.com: Gregory Hawkins
Chief Executive Officer
Buy.Com Inc.
21 Brookline Avenue
Aliso Viejo, California
With a copy to: General Counsel
Buy.Com Inc.
21 Brookline Avenue
Aliso Viejo, California
9.3 Entire Agreement: Waiver. This Agreement sets forth the
------------------------
entire understanding of the parties with respect to the subject matter hereof.
No modification or amendment or waiver of any of the provisions of this
Agreement will be effective unless in writing and signed by the party to be
charged.
9.4 Captions. Paragraph headings herein are for convenience only and
--------
will not affect the construction of this Agreement.
9.5 Governing Law. This Agreement will be governed by the laws of the
-------------
state of Tennessee.
9.6 Representations. Buy.com and IFSI represent and warrant that they
---------------
each have the authority to enter into this Agreement and to perform their
obligations hereunder. IFSI further represents and warrants that all of the
products delivered by IFSI to Buy.com's customers shall be delivered in the same
condition as such products were in when they were received by IFSI in its
distribution facility.
5
<PAGE>
9.7 Attorneys' Fees. If any action at law or in equity is necessary to
---------------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements, in
addition to any other relief to which the party may be entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
INGRAM FULFILLMENT SERVICES INC.
BY:_______________________________hereunto duly authorized
Print Name:_______________________
Title:____________________________
BUY.COM INC.
BY:_______________________________hereunto duly authorized
Print Name:_______________________
Title:____________________________
6
