EXHIBIT 10.15
▇▇▇▇▇▇ Micro Inc.
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
June 1, 2000
▇▇▇ ▇▇▇▇▇▇
Chief Operating Officer
PeoplePC, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: PeoplePC/Ford Beta Roll-out;
Delta Beta Roll-out
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Dear ▇▇▇:
This Letter of Understanding ("▇▇▇") is executed by and between ▇▇▇▇▇▇
Micro Inc. ("Ingram") and PeoplePC, Inc. ("PeoplePC") as of the date set forth
above. This ▇▇▇ sets forth the terms and conditions under which Ingram will
sell certain Hewlett-Packard ("H-P") computer systems and related products to
PeoplePC in connection with PeoplePC's H-P product beta roll-out to Ford Motor
Company ("Ford") and with PeoplePC's H-P product alpha roll-out to Delta Air
Lines ("Delta"). Ingram and PeoplePC agree as follows:
1. Products Sold. Ingram will sell to PeoplePC the computer product
systems and products in the quantity and type specified on the purchase orders
issued from PeoplePC to Ingram and dated as of May 15, 2000, copies of which are
attached to this ▇▇▇ as Attachment "A" (collectively, the "Purchase Orders").
The computer product systems and related products in the type and quantity
specified on the PO are collectively referred to herein as the "Products." A
"Product Unit" as used herein, means any of the following: a central processing
unit, a monitor, a printer or an accessory box. Except to the extent permitted
pursuant to Paragraph 2 below, the Purchase Orders are noncancellable; no act or
failure to act by Ford, Delta or any other party shall relieve PeoplePC of its
obligation to buy the Products from ▇▇▇▇▇▇.
2. Delivery Date. Ingram expects to take delivery of the Products from H-
P in installments commencing no later than May 17, 2000. Ingram shall have no
obligation to deliver timely to PeoplePC any portion of the Products not timely
delivered by H-P to Ingram. Representatives of People PC and ▇▇▇▇▇▇ Micro will
confer in good faith regarding the purchase and delivery schedule necessary to
meet the requirements of the Ford and Delta Beta programs. Parties will use
their best efforts to coordinate purchases and deliveries to meet such
requirements, and Ingram will use commercially reasonable efforts to implement
the agreed-upon schedule, provided that People PC has performed its other
material obligations under this ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
June 1, 2000
Page 2
3. Cost of Products. Ingram shall sell the Products to PeoplePC, and
People PC shall purchase the Products from Ingram, for an amount equal to
▇▇▇▇▇▇'▇ Cost divided by .961. As used in this ▇▇▇, ▇▇▇▇▇▇'▇ Cost means the sum
of: (i) the cost of the Products as actually invoiced to Ingram by H-P
(excluding therefrom any rebate, discount or other price reduction not appearing
on the face of the invoice), (ii) all out of pocket inbound freight and out of
pocket handling costs incurred by Ingram in receiving the Product into its
inventory. Additionally, PeoplePc shall pay to Ingram a labeling charge of
$3.00 per shipping container shipped by Ingram. Notwithstanding the prices
stated on the Purchase Orders, the parties agree that the sale price of the
Products, or any portion thereof, shall be calculated as set forth in this
Section 3.
4. Payment Terms. As a condition precedent to ▇▇▇▇▇▇'▇ obligations under
this ▇▇▇, including its obligation to sell to PeoplePC the Products or any
portion thereof, PeoplePC shall pay to Ingram by wire transfer the amount owing
from PeoplePC to Ingram, calculated pursuant to Section 3 above, for the
Products, or any portion thereof, that Ingram orders from H-P. Said wire
transfer must be effected within one business day after Ingram provides PeoplePC
with an invoice representing the amount due from PeoplePC to Ingram in
connection with said order of the Products. All other fees, charges and sums
owing under this ▇▇▇ shall be invoiced by Ingram to PeoplePC and shall be due
five (5) days after issuance of said invoice.
5. Labels. Ingram shall place labels provided by PeoplePC on the shipping
containers of each Product before shipping the Product to PeoplePC's customer;
provided that, PeoplePC delivers all such labels in sufficient quantity to
Ingram within five days following the date of this ▇▇▇.
6. Shipping and Freight Charges. Ingram shall ship the Products to
locations specified by PeoplePC within the United States, excluding Alaska and
Hawaii. Ingram shall ship the Products via UPS ground freight, unless another
carrier is specified by PeoplePC in writing prior to shipment. Ingram shall
invoice PeoplePC the actual freight cost incurred in shipping the Products.
7. Storage Charges. PeoplePC shall pay a storage fee equal to $10 per
month for each Product Unit held by Ingram in its inventory for each month or
part thereof following June 15, 2000.
8. Risk of Loss, Insurance. Ingram will bear the risk of loss of all
Products purchased under this ▇▇▇ while such Products are in ▇▇▇▇▇▇'▇ possession
or under ▇▇▇▇▇▇'▇ control. Ingram will carry casualty insurance coverage
covering such Products while in ▇▇▇▇▇▇'▇ possession or under ▇▇▇▇▇▇'▇ control in
amounts that are commercially reasonable.
▇▇▇▇ ▇▇▇▇▇
June 1, 2000
Page 3
9. Returned and Refused Products. Ingram shall accept Product that is
refused or that is returned to it by a PeoplePC customer. People PC shall incur
a returns handling fee of $40 per CPU, $40 per monitor, and $15 per other
Product unit for each such Product so refused or returned. PeoplePC shall remain
obligated to purchase Products from Ingram even if returned or refused by
PeoplePC customers. Ingram shall hold all such Product in inventory pending
further instruction by PeoplePC. All such returned or refused Product held in
▇▇▇▇▇▇'▇ inventory shall be subject to the storage fee described in Paragraph 7
above. Ingram shall not be required to re-box a Product returned to it. Ingram
shall have no other obligation to accept or process Products returned to it,
except as stated in this paragraph. PeoplePC shall have no stock balancing
privileges with respect to Product purchased under this ▇▇▇.
10. Terms of Sale. The Products sold hereby are subject to ▇▇▇▇▇▇'▇
standard terms and conditions of sale as published on its website at
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. However, to the extent that any of the terms and
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conditions of this ▇▇▇ conflict with ▇▇▇▇▇▇'▇ standard terms and conditions of
sale, the terms and conditions stated in this ▇▇▇ shall control. The PO shall
be used to identify product type and quantity only, and none of its terms shall
affect the terms of sale as set forth herein or affect ▇▇▇▇▇▇'▇ standard terms
and conditions of sale.
11. Reservation of Rights; No Waiver or Compromise. Nothing in this ▇▇▇
or the transaction contemplated hereby shall in any way limit or affect People
PC and ▇▇▇▇▇▇'▇ rights under that certain Internet Resale Agreement between
PeoplePC and Ingram dated as of August 1, 1999. People PC and Ingram each
specifically reserve all of their respective rights and remedies under and in
connection with the Internet Resale Agreement. The parties acknowledge that any
disputes with respect to the Internet Resale Agreement are not waived,
compromised or otherwise affected by this ▇▇▇ or the transaction contemplated
hereby.
12. Entire Agreement. This ▇▇▇ and ▇▇▇▇▇▇'▇ standard terms and conditions
of sale represent the entire agreement between ▇▇▇▇▇▇ Micro and PeoplePC
concerning the subject matter of this transaction. This ▇▇▇ supersedes all prior
understandings and communications on the subject matter of this transaction,
whether oral or written. This ▇▇▇ may only be modified by a writing executed by
an authorized representative of ▇▇▇▇▇▇ Micro and of PeoplePC. Nothing in this
▇▇▇ or in any prior agreement or communication shall obligate Ingram to supply
any computer or other products except for the Products identified herein.
If PeoplePC is in full agreement with the terms and conditions stated
herein, please sign the enclosed copy of this letter and return it to me.
Yours sincerely,
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
▇▇▇▇ ▇▇▇▇▇
June 1, 2000
Page 4
Accepted this day of May 2000.
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PeoplePC, Inc.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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