ONSALE, INC.
SALES AND DISTRIBUTION AGREEMENT
DATE: 2/17/99
The foregoing is to establish terms and conditions of a sales and distribution
agreement between Onsale, Inc. ("Onsale") of 1350 Willow Road, Menlo Park, Ca,
94025 and Inteletek Inc. ("Intelesale") with offices located at 220 Tompkins
Avenue; Pleasantville NY 10570, Inteletek wishes to distribute products via
Onsales's online auction and Onsale wishes to sell Inteletek's products to its
online customers.
A. RESPONSIBILITIES OF THE PARTIES
A.1 INTELETEK'S RESPONSIBILITIES:
1. Reserve for sale an inventory of all products ("Products") posted for
auction.
2. Provide detailed descriptions and pictures in an electronic format clearly
describing Products to be posted for auction.
3. Review and approve Product descriptions prior to auction openings.
4. Adhere to Product quality standards (see below).
5. Provide warranty coverage for all Products posted for auction (see below).
6. Provide pre and post customer service and support (see below).
7. Charge customer credit cards for the amount of the winning bid, shipping
and handling charges, and any applicable taxes.
8. Electronically receive order details from Onsale and electronically send
order status updates (see attached Order Operations Manual attached).
9. Charge and Ship all orders following the close of all auctions (within 24
hours). Within a specified time.
10. Pay Onsale (less Inteletek's commission) upon the shipment of product. Upon
receipt of invoice.
11. Keep all customer order information and other confidential information
secure and safe from external breach (see order Operations manual).
12. Submit a completed Supplier Profile (see attachment A).
A.2 ONSALE'S RESPONSIBILITIES:
1. Manage and promote the auction process.
2. Set minimum bids, bid increments, auction length, quantity and auction
format.
3. Award Products to the highest bidders.
4. Collect customer information.
5. Electronically transmit customer order details to Inteletek and
electronically receive order status updates.
6. Provide first line customer support.
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Exhibit 10.27
B. PRODUCTS:
1. Products advertised as new must be in the original manufacturers packaging.
2. Refurbished or remanufactured to the original manufacturer specifications.
3. All Products must have a warranty.
4. All Products must be clearly described in terms of condition, contents of
the box, pertinent operating specifications, color, size, compatibility,
packaging, and any other descriptions that are needed to clearly describe
the Product and its functionality.
5. Onsale and Inteletek will work together to decide an acceptable assortment
of Inteletek's Products. Onsale is ultimately responsible for deciding what
Products go up for auction and reserves the right to reject any Products or
discontinue the auction of Products at any time and for an indefinite
period.
C. WARRANTY:
1. The manufacturer's original warranty will apply for all new Products and
Products refurbished by the original manufacturer. Inteletek will verify
these warranties prior to posting the Products for auction, including
verification of "800" phone support and the actual warranty honored by the
manufacturer.
2. For all other Products, Inteletek will provide a minimum 30 day warranty.
3. The warranty will provide for phone support, repair, replacement or full
credit to customer's credit card.
4. Inteletek will pay for outbound freight for all warranty claims.
5. Inteletek will satisfy each warranty claim or instruct Onsale to issue the
customer credit within five business days from the date of the first
Inquiry.
D. CUSTOMER SERVICE:
D.1 ONSALE'S RESPONSIBILITY:
1. Onsale will provide first line customer service for basic logistics
support.
2. Onsale will refer all customers to Inteletek for all support issues beyond
basic questions regarding the auction, shipping, and basic product
information.
3. Onsale will provide additional customer support for unresolved customer
service requests directed originally at Inteletek.
D.2 INTELETEK'S RESPONSIBILITIES:
1. Prior to posting Products for auction, Inteletek will have a Customer
Service function in place to support all sales.
2. Inteletek's Customer Service will be staffed with trained, experienced, and
technically competent resources.
3. Inteletek will have phone support staffed at a minimum from 9:00 a.m. to
6:00 p.m. eastern time.
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Exhibit 10.27
a. Inteletek's Customer Service will answer all phone calls within a
reasonable time or via an automatic call distribution system.
b. Daily average customer hold times will be maintained to a ten minute
average.
4. Inteletek will maintain a Customer Service email address and will respond
to each e-mail within 24 hours of receipt.
5. Inteletek will solve all service requests within 48 hours of receipt.
6. Service Requests are solved through e-mail or telephone support and are
considered resolved when:
a. An RMA and call tag has been issued or
b. An accommodation is given or
c. An alternative Product is sourced for the customer or when
d. The manufacturer or manufacturer's designated third party has
acknowledged the service request.
7. Measurements of performance against Customer Service standards will be
maintained and made available to Onsale personnel on a regular basis.
Inteletek will expeditiously implement corrective action when any key
measurement drops below standard.
8. Inteletek will maintain all customer correspondence in a central electronic
data base or file; this information will be made available to Onsale upon
request.
9. Inteletek will designate dedicated individuals within Inteletek's
organization to coordinate all product delivery issues. Contact names and
phone numbers to be provided and kept current throughout the relationship.
E. ORDERS:
1. As per the Order Operations Manual, Onsale will electronically transmit all
orders to Inteletek.
2. Inteletek will charge and ship all successful orders within the time frame
as specified on page/sku.
3. Inteletek will electronically transmit shipment tracking numbers to update
Onsale's customer order records and accounts receivable system.
4. Inteletek will measure its shipping performance and will notify Onsale of
any deviation below standard and will immediately implement corrective
action.
5. Inteletek is responsible for in transit shipping damage and will replace
the customer's order or will issue credit.
F. PAYMENT AND TERMS:
1. Inteletek will pay Onsale on per receipt of invoice for all orders from the
previous weeks auction closes in which Inteletek has successfully charged
and shipped, at a commission of [*].
2. Inteletek will notify Onsale of any credits made to customers as a result
of refunds or returns.
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Exhibit 10.27
G. PRODUCT RETURNS:
1. In the event Onsale receives any customer returned product, return
information will be forwarded to Inteletek for reconciliation with the
customer. Onsale will ship customer products to Inteletek at Inteletek's
cost.
H. LIMITATIONS OF LIABILITY:
1. Onsale's and Inteletek's total liability to the other party will be limited
to the amounts paid to Onsale or Inteletek by the other party under this
agreement.
2. In no event will Onsale or Inteletek be liable to the other party for any
special, incidental, or consequential damages, whether based on breach of
contract, tort (including negligence), product liability, or otherwise, and
whether or not either party has been advised of the possibility of such
damage.
3. The parties have agreed that the limitations specified in this section will
survive and apply even if any limited remedy specified in this agreement is
found to have failed of its essential purpose.
I. CONFIDENTIALITY:
Inteletek and Onsale acknowledges that any information regarding this Agreement,
including the transactions contemplated herein, and any information conveyed to
or obtained by either party in connection with this Agreement (including without
limitation business plans and data; financials; client records and lists;
technical data and protocols; specifications) is confidential and proprietary to
both parties and/or its respective affiliates (the "Onsale Confidential
Information"). Inteletek and Onsale agrees that in no event shall either party
disclose, transfer, copy, duplicate, or publish either parties Confidential
Information to any third party without the prior written consent of Onsale or
Inteletek, which consent may be withheld in either parties sole discretion.
Inteletek and Onsale further agrees that they shall not utilize either parties
information for any purpose whatsoever other than for the purpose of performing
its obligations under this Agreement. Inteletek shall make available the Onsale
Confidential Information to its employees on a need-to-know basis and shall
advise such employees of the restriction set forth with respect to the use of
such Onsale Confidential Information. Both parties shall be responsible for the
unauthorized disclosure of either parties Confidential Information by its
employees. Upon termination or expiration of this Agreement or demand of Onsale,
Inteletek shall immediately return Onsale any and all Onsale Confidential
Information, including copies thereof, maintained by Inteletek.
Both parties acknowledge that the Onsale and Inteletek's Confidential
Information is a valuable asset to both parties and that the breach of this
Section would cause irreparable harm for which there is no adequate remedy at
law. Accordingly, in the event of a breach or alleged breach of this Section,
both parties shall be allowed injunctive relief and any other equitable remedies
in addition to remedies afforded by law. The obligations pursuant to this
Section shall survive the termination of this Agreement.
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Exhibit 10.27
J. INDEMNITIES:
Inteletek agrees to defend, indemnify and hold harmless Onsale, its corporate
patent and affiliated companies, and the employees, officers, directors and
agents of each of them, against any and all claims, liabilities, damages and
costs, including reasonable attorney's fees and settlement amounts, arising from
i) any action or alleged defect in a Product supplied by Inteletek pursuant to
this Agreement; ii) any actual or alleged infringement of any patent, copyright,
trademark or other intellectual property right by a Product supplied by
Inteletek pursuant to this Agreement; or iii) a breach by Inteletek of any
provision of this Agreement. Inteletek's responsibilities under this Section
shall survive termination of this Agreement.
K. GENERAL TERMS:
1. Inteletek warrants that all Products shall be legally resellable within the
United States, Canada, and Mexico (unless otherwise stated in writing) and
in the exact conditions represented by Inteletek. All Products shall be
individually and adequately packaged in such a manner to be delivered
without damage to Onsale's customers via overnight courier or UPS shipment.
Onsale reserves the right to refuse to post any merchandise under this
agreement. It is expressly understood that by the terms of this agreement
that Inteletek will be exposed to Onsale confidential information,
including, but not limited to, Onsale auction techniques and logic, pricing
and merchandising strategies, order handling processes and procedures,
contractual structures and general business techniques. This information
will be held in confidence by Inteletek and will not be disclosed to, nor
viewed by, a third party, and will be used only pursuant to the business
relationship with Onsale. Inteletek may not solicit to Onsale's customers
without the express written permission of Onsale.
2. In no event will Onsale act as a bailee for the Products. Onsale hereby
disclaims any obligations that arise from or relate to any bailment
relationship.
3. Employees and/or agents of Inteletek are forbidden to place bids or cause
bids to be placed on Products posted by Inteletek.
4. Any dispute related to this Agreement shall be (i) brought in the state or
federal courts located in the Northern District of California and (ii)
governed by California law, without regard to any choice of law rules. The
parties are independent contractors, and this Agreement shall not be
interpreted as creating any relationship of employment, agency, joint
venture, partnership or any other fiduciary relationship of any kind. All
notices shall be deemed effective upon dispatch and sent via facsimile or
overnight express, return receipt requested. This Agreement is the complete
and exclusive agreement between Onsale and Inteletek with respect to the
subject matter hereof, superseding and replacing any and all prior
agreements, communications, and understandings regarding such subject
matter, and shall apply to any goods supplied to Onsale by Inteletek under
any prior agreement.
5. Inteletek will pay all taxes and duties assessed in conjunction with this
agreement and its performance by any authority within or outside of the
U.S.
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Exhibit 10.27
L. TERM AND TERMINATION:
1. This Agreement may not be modified except in writing and signed by both
Onsale and Inteletek.
2. This Agreement will remain in effect until terminated.
3. This Agreement may terminate this Agreement at any time, with or without
cause, upon 60 days written notice.
4. Neither party shall be liable to the other for any costs or damages of any
kind resulting solely from termination or expiration of this agreement in
accordance with its terms.
5. Inteletek will be responsible for all costs or damages that result from
Inteletek's failure to perform its obligations under this Agreement.
6. Inteletek will provide ONSALE 90 days advance notice of any intention to
enter the online auction business.
M. MISCELLANEOUS:
1. Both parties represent and warrant that they are in compliance with and
will continue to comply in all respects with all applicable federal, state
and local laws and regulations in connection with their obligations under
this Agreement and that they have all required licenses, permits,
registrations or similar regulatory approvals required to perform its
obligations under this Agreement.
2. Both parties acknowledge that all customer information including credit
card information provided by Onsale to Inteletek under this agreement will
be kept confidential and secure and Inteletek will not use the customer
information for any purpose other than what is required to complete its
obligations under this agreement; customer information shall not be sold or
assigned to any third party for any reason.
3. Onsale possesses an auction bond with the Secretary of State in California,
in compliance with Civil Code Section 1812.600-608. BOND #: SUN 405305.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first stated above.
Onsale, Inc.
By: Title:
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Signature: Date:
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Inteletek
By: Title:
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Signature: Date:
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Sales and Distribution Agreement - Onsale Inc. and Inteletek Inc.
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