{"id":42765,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/sales-finance-agreement-peoplepc-inc-and-mbna-america-bank-na.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"sales-finance-agreement-peoplepc-inc-and-mbna-america-bank-na","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/sales-finance-agreement-peoplepc-inc-and-mbna-america-bank-na.html","title":{"rendered":"Sales Finance Agreement &#8211; PeoplePC Inc. and MBNA America Bank NA"},"content":{"rendered":"<pre>\n                                   PEOPLEPC\n                            SALES FINANCE AGREEMENT\n\nThis Agreement is by and between MBNA AMERICA BANK, N.A., a national banking\nassociation having its principal place of business in Wilmington, Delaware\n(\"MBNA\"), and PEOPLEPC, INC, a  Delaware corporation having its principal place\nof business in San Francisco, California (\"PeoplePC\") for themselves, and their\nrespective successors and assigns.  The Effective Date of this Agreement is as\nset forth in Section 1(e) below.\n\nWHEREAS, PeoplePC is and will be engaged in the business of providing personal\ncomputers and related goods and services to its Members; and\n\nWHEREAS, MBNA is engaged in the business of providing various consumer credit\nproducts; and\n\nWHEREAS, PeoplePC and MBNA desire that MBNA provide various Loan Accounts to\nMembers, certain of which shall be offered in conjunction with a purchase\nfinancing program for PeoplePC Products.\n\n1.   DEFINITIONS\n\nWhen used in this Agreement,\n\n(a)  \"Agreement\" means this agreement and Schedules A, B, C, and D, and Exhibit\n     1.\n\n(b)  \"Completed Application\" means an application for a Loan Account submitted\nby a Member to MBNA, pursuant to the Referral Procedures, and for which no\nadditional information is required by MBNA prior to decisioning, as determined\nsolely by MBNA. A Completed Application shall include, at a minimum the\nfollowing completed application fields: (i) name; (ii) address; (iii) social\nsecurity number; (iv) home and business phone; (v) date of birth; (vi) annual\nsalary; and, (viii) employer.\n\n(c)  \"Customer\" means any Member who is a participant in the Program.\n\n(d)  \"Credit Information\" means all information collected by MBNA in connection\nwith a Member's credit application, including credit reports and credit scores,\nand all subsequent transactions and all other activity on a Loan Account, and\nthe Loan Accounts themselves.\n\n(e)  \"Effective Date\" means the day on which the last of the following events\noccurs: (a) this Agreement is mutually executed by the parties, and (b) MBNA\nprovides PeoplePC with initial written approval over the PeoplePC website\npursuant to Section 4(c).\n\n(f)  \"Loan Account\" means a revolving loan account opened by a Customer in\nresponse to marketing efforts made pursuant to the Program. The Loan Account is\nproprietary to MBNA and\n\nConfidential treatment has been requested with respect to the omitted portions \nof this exhibit. The copy filed herewith omits the information subject to the \nconfidentiality request. Omissions are designated as [*]. A complete version of \nthis exhibit of this exhibit has been filed separately with the Securities and \nExchange Commission.\n\n                                       1\n\n \nand will have the terms and features listed on Schedule A, as they may be\nmodified pursuant to Section 9 of this Agreement.\n\n(g)  \"Member\" means any end-user purchaser or potential purchaser of PeoplePC\nProducts and\/or other potential participants mutually agreed upon by PeoplePC\nand MBN.\n\n(h)  \"Member Information\" means demographic and other information concerning the\nMembers commonly collected by PeoplePC in its ordinary course of business, in\nconjunction with an application for membership with PeoplePC.\n\n(i)  \"PeoplePC Products\" means the personal computers and other products and\nservices created, provided or offered by PeoplePC, its employees, agents and\nrepresentatives and other items financed with a Loan Account, as mutually agreed\nupon by the parties.\n\n(j)  \"Phase 1\" means the initial period of this Agreement beginning on the\nEffective Date and ending at 11:59 PM on March 20, 2000, or at an earlier date\nas determined by PeoplePC and agreed to by MBNA.\n\n(k)  \"Pre-Effective Date Applications\" means those applications for credit\nsubmitted by Members prior to the Effective Date.\n\n(l)  \"Program\" means the marketing, origination and processing of the Loan\nAccounts and all related rights and obligations of PeoplePC and MBNA related\nthereto as set forth in this Agreement.\n\n(m)  \"Referral Procedures\" means the procedures provided by MBNA pursuant to\nwhich Members interested in Loan Accounts will be referred to MBNA or otherwise\noffered Loan Accounts, as the Procedures may be amended from time to time.\n\n(n)  \"Settlement Account\" means a banking account designated by PeoplePC and\ndescribed on Schedule C hereto, to be used for receipt of certain Loan Account\nproceeds.\n\n(o)  \"Trademarks\" means any design, image, visual representation, logo, service\nmark, trade dress, trade name, or trademark used or acquired by MBNA or\nPeoplePC, as the case may be, during the term of this Agreement.\n\n2.   TWO PHASE PROGRAM ROLL-OUT\n\nThe parties agree to make the Program available to Members in two separate\nphases.\n\n(a)  Phase 1: During Phase 1, MBNA shall approve only those Members with FICO\ncredit scores of [*] or higher (and which otherwise meet MBNA's credit approval\ncriteria), and shall decline all other Member applications for credit. For all\nsuch applications approved by MBNA during Phase 1, MBNA shall offer a Loan\nAccount with an annual percentage rate of approximately 10.95% for PeoplePC\nProduct purchases, and PeoplePC shall pay to MBNA a discount payment equal to\nthe amount described on Schedule B (the \"Phase 1 Discount\") for such Loan\nAccount. The total aggregate Phase 1 Discount earned by MBNA each day shall be\noffset on a daily basis against\n\n*****Certain information on this page has been omitted and filed separately with\n     the Securities and Exchange Commission. Confidential treatment has been\n     requested with respect to the omitted portions.\n\n \nPeoplePC's Settlement Account. All other rights and obligations for the parties\notherwise set forth in this Agreement shall apply during Phase 1.\n\n(b)  Post Phase 1:  After the completion of Phase 1, MBNA shall apply its then-\ncurrent standard Loan Account application decisioning strategies, as they may be\nmodified from time to time, in decisioning Member applications for credit\n(including the use of a sliding scale of annual percentage rates based on credit\nworthiness, among other things); provided, however, that Members with FICO\ncredit scores of [*] or higher (and which otherwise meet MBNA's credit approval\ncriteria) will be approved for a Loan Account with an APR of approximately\n10.95% for PeoplePC Product purchases. MBNA shall notify PeoplePC of each such\nmember approved at such a rate and PeoplePC shall pay to MBNA a discount payment\nequal to the amount described on Schedule B (the \"Standard Discount\") for such\nLoan Account. The total aggregate Standard Discount earned by MBNA each day\nshall be offset on a daily basis against PeoplePC's Settlement Account. All\nother rights and obligations for the parties otherwise set forth in this\nAgreement shall apply after Phase 1.\n\n3.   MBNA RIGHT OF FIRST DECISION\n\n(a)  Subject to subsection 3(b) below, PeoplePC shall refer one hundred percent\n(100%) of its Members desiring financing to MBNA for initial decisioning (the\n\"Right of First Decision\"). If a Loan Account application is declined by MBNA,\nPeoplePC shall be free to refer the Member to a third party lender; provided\nthat MBNA has no obligation whatsoever to assist in such application referral,\nand shall incur no expense in regard to any such application referral.\n\n(b)  MBNA's Right of First Decision shall not be deemed to apply to the extent\nthat a PeoplePC affiliate offers consumer-purpose financing to Members of the\ntype offered by MBNA. In the event that any PeoplePC affiliate issues consumer-\npurpose loans or lines of credit to Members, and such affiliate elects to sell\nthe portfolio of such accounts, in its ordinary course of business, then MBNA\nshall have a right of first refusal to purchase that portfolio, the terms of\nsuch a purchase and sale to be negotiated at that time. MBNA will notify\nPeoplePC (or the seller if different from PeoplePC) of its intent to exercise\nsuch right with thirty (30) days after MBNA's receipt of the notice of sale,\npursuant to Section 15(f) hereof.\n\n4.   PROGRAM\n\n(a)  Design and Administration:  Subject to PeoplePC's rights of prior approval\nas otherwise set forth herein, MBNA shall design, develop and administer the\nProgram for the Members. The Program will offer Customers the right to request\nadditional advances on Loan Accounts. MBNA reserves the right to evaluate the\nProgram periodically to determine its compliance with applicable laws, rules and\nregulations and make all adjustments to the Loan Accounts and the Program, as\ndeemed necessary and advisable by MBNA, or its legal advisors. For example, but\nwithout limitation, MBNA may make adjustments to the Program to ensure that the\nLoan Accounts are open-end lines of credit under the Truth In Lending Act, as\nimplemented by Regulation Z, and that the Loan Accounts offered under the\nProgram are not covered by the Federal Trade Commission's \"Holder Rule\" (16\nC.F.R. (S)443).\n     \n\n*****Certain information on this page has been ommitted and filed\n     separately with the Securities and Exchange Commission. Confidential\n     treatment has been requested with respect to the omitted portions.\n\n \n(b)  PeoplePC Website Procedures \/ Notification of Decision: PeoplePC will\nmaintain the appropriate links and textual information on its website to\nfacilitate the submission of applications for Loan Accounts by the Members to\nMBNA. For each Completed Application decisioned by MBNA utilizing MBNA's then-\ncurrent instant decisioning tool, MBNA shall promptly notify PeoplePC of the\nfinal credit decision.\n\n(c)  PeoplePC Product Marketing; Publicity: In connection with the promotion,\noffer or sale of PeoplePC Products, PeoplePC may refer to MBNA, the Program, or\nthe Loan Accounts, provided, however, that should any PeoplePC Product\nadvertising, solicitation or other materials make such reference, MBNA shall\nhave the right of prior approval over all such materials, such approval not to\nbe unreasonably withheld or delayed. PeoplePC shall provide MBNA with prompt\nand, where practicable, prior notice of all other publicity dealing with the\nProgram and\/or Loan Accounts (including, for example, press interviews) and all\nsuch publicity shall be accurate and consistent with the then-current materials\nprovided or approved by MBNA.  All such marketing and publicity shall be at\nPeoplePC's sole cost and expense. Notwithstanding the above, PeoplePC may\nrespond to individual inquiries about the Program from Members on an individual\nbasis, provided that said responses are accurate and consistent with the then-\ncurrent materials provided or approved by MBNA. Any correspondence received by\nPeoplePC that is intended for MBNA (e.g., payments, billing inquiries, etc.)\nshall be forwarded to MBNA via overnight courier within two business days of\nreceipt.  All charges incurred for this service will be paid by MBNA.\n\n(d)  Educational and Loan Account Materials: If MBNA and PeoplePC agree to\ndevelop special marketing, educational or background materials, MBNA and\nPeoplePC shall develop such materials jointly. Both MBNA and PeoplePC shall have\nthe right of prior approval over the final version of all such materials, such\napproval not to be unreasonably withheld.\n\n(e)  Compliance with Applicable Law: Subject to its right to review the website\nor other PeoplePC-controlled media whereby Loan Accounts are offered to Members\nor other consumers, and provided that PeoplePC has notified MBNA of website\nchanges, MBNA shall be responsible for ensuring that the Loan Accounts are\noffered and processed in compliance with all applicable federal and state law.\nPeoplePC agrees to comply with MBNA's instructions regarding the offering and\nprocessing of Loan Accounts. Further, PeoplePC shall ensure that each of its\nemployees, agents or representatives and all other persons who assist with\noffering or processing of Loan Accounts are educated and knowledgeable regarding\nthe Referral Procedures, Loan Accounts and the laws, rules and regulations\napplicable to the offering and processing of Loan Accounts, and comply with the\nsame. MBNA may monitor or test any credit solicitation process by PeoplePC\nemployees, agents or representatives, including through off-site listening as\npermitted by law.\n\n(f)  Settlement of Loan Accounts: Payment of funds owing to PeoplePC as the\nresult of PeoplePC Products financed by Loan Accounts shall be handled in the\nfollowing manner. PeoplePC shall transmit to MBNA each day, but not more than\nonce daily, to MBNA Hallmark Information Systems, Inc., (or other entity\ndesignated by MBNA) a settlement file pertaining to purchases made on Loan\nAccounts containing account number, amount of transaction, transaction date, and\nname and address of Customer and other agreed upon information. PeoplePC shall\ndelay submission of each settlement file to MBNA until the corresponding\nPeoplePC Products have been shipped to the\n     \n\n \nCustomer. Provided PeoplePC submits settlement files as described above, MBNA\nshall credit the Settlement Account described on Schedule C hereto within (i)\nsix (6) business days after MBNA's receipt of such settlement file for\nsettlement pertaining to Completed Applications submitted in the direct\nmarketing channel, and (ii) three (3) business days after MBNA's receipt of such\nsettlement file for settlement pertaining to Completed Applications submitted in\nthe internet marketing channel. The parties agree that MBNA's occasional\ndeviation from these settlement times shall not constitute a material breach of\nthis Agreement. For purposes of the prior sentence, \"occasional deviation\" shall\nmean not more frequently than five (5) occurrences in any given two-month period\n(beginning with the March\/April 2000 period, followed by the May\/June 2000\nperiod, etc.), of MBNA's delaying settlement transmission. MBNA may deduct from\nthe Settlement Account any amounts already credited which related to the\nCustomer's legitimate rejection of the Loan Accounts, as permitted pursuant to\nfederal law, rule or regulation.\n\n(g)  MBNA Customer Service Performance Standards:  MBNA shall provide services\nto the Customers in accordance with MBNA's standard policies and practices in\neffect from time to time.\n\n5.   CREDIT INFORMATION AND MEMBER INFORMATION\n\n(a)  The parties acknowledge and agree that Credit Information is confidential\nand proprietary to MBNA and that Membership Information is confidential and\nproprietary to PeoplePC. Both parties disclaim any property right or interest in\nconfidential information that is the property of the other party. MBNA and\nPeoplePC agree, subject to restrictions which may now or in the future be\nimposed by applicable law, that they may share such information with the other\nfor the purpose of marketing products and services to the Customers. Both\nparties agree that any such confidential information belonging to the other\nparty coming into the possession of the non-owner party shall be held in\nabsolute and strict confidence and shall not be shared, copied, sold or\ntransferred to any other person in any manner whatsoever. Both parties agree to\nuse such confidential information, regardless of which party may own such\ninformation, in a manner consistent with that party's respective privacy policy.\n\n(b)  MBNA and PeoplePC acknowledge and agree that, from time to time, either\nparty may, in the operation of the Program, use the other party's confidential\ninformation. MBNA and PeoplePC agree that such use is limited to purposes\ndirectly necessary to the non-owner party's performance under this Agreement or\nas the owner party permits in writing. Both parties agree to comply with the\nreasonable request of the other party with respect to security procedures to\nmaintain the confidentiality of the Credit Information and the Membership\nInformation, including providing reasonable training and oversight of employees,\nagents and\/or representatives who have access to such information.\n\n \n6.   TRADEMARKS\n\nPeoplePC and MBNA each hereby grants the other party a limited, exclusive\nlicense to use its Trademarks solely in conjunction with the Program, including\nthe promotion thereof, as evidenced by the granting party's prior written\napproval of any use of a Trademark pursuant to Sections 4(c)-(e).  The\nTrademarks may not be used by any other person for any other reason except as\nspecifically approved for the Program.  This license shall remain in effect for\nthe duration of this Agreement, and shall apply to the Trademarks,\nnotwithstanding the transfer of such Trademarks by operation of law or otherwise\nto any permitted successor, corporation, organization or individual.  Nothing in\nthis Agreement prohibits PeoplePC or MBNA from granting to other persons a\nlicense to use the Trademarks in conjunction with the providing of any other\nservice or product.\n\n7.   DISPUTES AND REFUNDS.\n\n(a)  PeoplePC Responsibilities: PeoplePC shall promptly resolve Member disputes\nregarding PeoplePC, including any objection by a Customer to repayment of a Loan\nAccount, whether arising directly or indirectly through MBNA or PeoplePC, and\nshall do so in a manner in satisfaction of applicable laws, rules and\nregulations.\n\n(b)  MBNA Responsibilities: MBNA shall promptly resolve Customer disputes\nregarding the grant or denial of an application for a Loan Account by MBNA,\nwhether arising directly or indirectly through MBNA or PeoplePC, in a manner in\nsatisfaction of applicable laws, rules and regulations.\n\n(c)  Mutual Responsibilities: In the event a Customer dispute encompasses\nmatters set forth in both subsections (a) and (b) above, PeoplePC and MBNA shall\nuse their reasonable efforts to jointly resolve such complaint.\n\n(d)  Refunds\/Finance Charges: MBNA acknowledges and agrees that PeoplePC permits\nMembers to cancel their memberships and obtain a full refund of the membership\nfee within 7 days of becoming a Member. PeoplePC does not permit any\ncancellation or return by a Member after the expiration of that 7-day period for\ndisputes related to the quality of the PeoplePC Products. In the event of such\nrefunds, PeoplePC will remit any funds that it has received from the canceling\nCustomer directly to that Customer. Notwithstanding the above, MBNA reserves the\nright to charge back to PeoplePC the unpaid balance (plus accrued but unpaid\nfees and finance charges) of any Loan Account for which PeoplePC has failed to\nrespond to MBNA regarding the PeoplePC decision for each Member dispute, as such\nobligation is set forth in 6(a) above, within 45 days from the date the dispute\narose.\n\n(e)  PeoplePC Product Disputes: If Customers refuse to pay any amounts owing\nunder a Loan Account due to legitimate, bona fide disputes about the ready\navailability of services or the fitness of goods constituting the PeoplePC\nProducts, MBNA may from time to time provide information to PeoplePC regarding\nsuch disputes.  PeoplePC shall research the disputes and provide prompt feedback\nto MBNA on the disputes.  PeoplePC and MBNA shall negotiate in good faith to\nreduce the incidence and severity of such disputes.  If the incidence and\nseverity of the disputes are unacceptable to MBNA in its reasonable business\njudgment, and PeoplePC does not cure such disputes within forty \n\n \nfive (45) days after receipt of notice from MBNA about such disputes, then MBNA\nreserves the right to terminate the Program upon forty five (45) days prior\nnotice to PeoplePC.\n\n8.   REPRESENTATIONS AND WARRANTIES\n\n(a)  Mutual Representations: PeoplePC and MBNA each represents and warrants to\nthe other that as of the Effective Date and throughout the term of this\nAgreement:\n\n     1.   It is duly organized, validly existing and in good standing.\n\n     2.   It has all necessary power and authority to execute and deliver this\n          Agreement and to perform its obligations under this Agreement.\n\n     3.   This Agreement constitutes a legal, valid and binding obligation of\n          such party, enforceable against such party in accordance with its\n          terms, except as such enforceability may be limited by bankruptcy,\n          insolvency, receivership, reorganization or other similar laws\n          affecting the enforcement of creditors' rights generally and by\n          general principles of equity.\n\n     4.   No consent, approval or authorization from any third party is required\n          in connection with the execution, delivery and performance of this\n          Agreement, except such as have been obtained and are in full force and\n          effect.\n\n     5.   The execution, delivery and performance of this Agreement by such\n          party will not constitute a violation of any law, rule, regulation,\n          court order or ruling applicable to such party.\n\n     6.   It is currently meeting scheduled events with regard to its formulated\n          plan to remediate any problems or issues arising from the Year 2000\n          Problem. The Year 2000 Problem as used herein means any significant\n          risk that computer hardware or software used in the receipt,\n          transmission, processing, manipulation, storage, retrieval,\n          retransmission or other utilization of data or in the operation of\n          mechanical or electrical systems of any kind will not, in the case of\n          dates or time periods occurring after December 31, 1999, function as\n          effectively as in the case of dates or time periods occurring prior to\n          January 1, 2000.\n\n     7.   It has the right and power to license its Trademarks to the other\n          party for use as contemplated by this Agreement.\n\n(b)  PeoplePC Representations: PeoplePC additionally represents and warrants to\nMBNA that  as the Effective Date and throughout the term of the Agreement:\n\n     1.   It will comply in all material respects with the PeoplePC corporate\n          fraud policy (attached hereto as Exhibit 3) and will give MBNA 60 days\n          prior notice of any change to such fraud policy.\n\n     2.   It will comply in all material respects with any contract or terms of\n          sale with the Customer and the terms of any warranty liability,\n          express or implied, applicable to the PeoplePC Products financed or\n          otherwise offered in connection with the Program\n\n \n     3.   All applications, agreements and other materials used for the Program\n          shall be those supplied by MBNA specifically for the Program, and\n          PeoplePC shall not have any knowledge of any material misstatements or\n          omissions in any application submitted for a credit decision.\n\n     4.   All applications will be available to the public: (i) without regard\n          to race, color, religion, national origin, sex, marital status, or age\n          (provided the applicant has the capacity to enter into a binding\n          contract) and (ii) not in any manner which would discriminate against\n          an applicant or discourage an applicant from applying for a Loan\n          Account.\n\n     5.   Financing will be made available only to consumers for personal,\n          family or household purposes, and that no defense, set off, or\n          counterclaim exists as to the sale of the PeoplePC Products as a\n          result of any act or omission of PeoplePC or its employees or agents.\n\n     6.   PeoplePC has no obligation (whether arising out of contract or\n          otherwise) to refer any Pre-Effective Date Application(s) to any third\n          party lender, and has no knowledge of any reason why MBNA would incur\n          any loss, liability, damage, expense, cause of action or claim (other\n          than standard credit risk typically associated with MBNA's business)\n          with regard to MBNA's decisioning the Pre-Effective Date Applications.\n\n9.   PROGRAM ADJUSTMENTS\n\nA summary of the current features of the Program is set forth in Schedule A.\nMBNA reserves the right to make periodic adjustments to the Program and its\nterms and features and shall give PeoplePC reasonable notice of any such\nmaterial adjustments.  Delaware and applicable federal law currently require\neach open-end credit account Customer be given the opportunity to reject a\nproposed change and pay the existing balance under the prior terms if the\nproposed adjustment increases the annual percentage rate on such account.\n\n10.  CROSS INDEMNIFICATION\n\nPeoplePC and MBNA each will indemnify and hold harmless the other party, its\ndirectors, officers, agents, employees, affiliates, insurers, successors and\nassigns (the \"Indemnitees\") from and against any and all loss, liability,\ndamage, expense, cause of action, claim, and the reasonable and actual costs\nincurred in connection therewith (\"Losses\"), resulting from the material breach\nof this Agreement by PeoplePC or MBNA, respectively as the case may be, or its\ndirectors, officers or employees.  PeoplePC will indemnify and hold harmless\nMBNA and its Indemnitees from and against any and all Losses arising from (i)\nany actual or alleged damages to any person or property arising from any\nPeoplePC Product; (ii) acts of fraud perpetrated by any Member in connection\nwith a Loan Account application and acts of fraud by PeoplePC or its employees\nor agents, and (iii) the Pre-Effective Date Applications.  Each party shall\npromptly notify the other party in the manner\n\n \nprovided herein upon learning of any claims or complaints that may reasonably\nresult in the indemnification by the other party.\n\n11.  CONFIDENTIALITY OF AGREEMENT\n\nThe terms of this Agreement, any proposal, financial information and proprietary\ninformation provided by or on behalf of one party to the other party prior to,\ncontemporaneously with, or subsequent to, the execution of this Agreement\n(\"Information\") are confidential as of the date of disclosure.  Such Information\nwill not be disclosed by such other party to any other person or entity, except\nas permitted under this Agreement or as mutually agreed in writing.  MBNA and\nPeoplePC shall be permitted to disclose such Information (i) to their\naccountants, legal, financial and marketing advisors, and employees as necessary\nfor the performance of their respective duties, provided that said persons agree\nto treat the Information as confidential in the above described manner and (ii)\nas required by law or by any governmental regulatory authority.\n\n12.  STATE LAW GOVERNING AGREEMENT\n\nThis Agreement shall be governed by and subject to the laws of the State of\nDelaware (without regard to its conflict of laws principles) and shall be deemed\nfor all purposes to be made and fully performed in Delaware.\n\n13.  TERMINATION\n\n(a)  Breach; Notice; Cure: In the event of any material breach of this Agreement\nby MBNA or PeoplePC, the other party may terminate this Agreement by giving\nnotice, as provided herein, to the breaching party. This notice shall (i)\ndescribe the material breach; and (ii) state the party's intention to terminate\nthis Agreement. If the breaching party does not cure or substantially cure such\nbreach within forty five (45) days after receipt of notice, as provided herein\n(the \"Cure Period\"), then this Agreement shall terminate forty five (45) days\nafter the Cure Period.\n\n(b)  Mutual Termination Right: Either party shall have the right to terminate\nthis Agreement upon ninety days prior written notice to the other; provided,\nhowever, that PeoplePC shall not be entitled to exercise this right of\ntermination until such time as MBNA has received a minimum of [*] Completed\nApplications generated through marketing channels approved by MBNA (such as the\ninternet), exclusive of the Pre-Effective Date Applications.\n\n(c)  Insolvency: If either MBNA or PeoplePC becomes insolvent in that its\nliabilities exceed its assets, or is adjudicated insolvent, or take advantage of\nor is subject to any insolvency proceeding, or makes an assignment for the\nbenefit of creditors or is subject to receivership, conservatorship or\nliquidation then the other party may immediately terminate this Agreement.\n\n(d)  Effect on Trademarks: Upon termination of this Agreement, each party shall,\nin a manner consistent with this Section of this Agreement, cease to use the\nother party's Trademarks. Each party agrees that upon such termination it will\nnot claim any right, title, or interest in or to the Trademarks provided\npursuant to this Agreement. However, each party may conclude all solicitation\nthat is required by law.\n\n*****Certain information on this page has been omitted and filed separately with\n     the Securities and Exchange Commission. Confidential treatment has been\n     requested with respect to the omitted portions.\n\n \n(e)  MBNA Right of Prior Review:  MBNA shall have the right to prior review and\napproval of any notice in connection with, relating or referring to the\ntermination of this Agreement to be communicated by PeoplePC to the Members.\nSuch approval shall not be unreasonably withheld. Upon termination of this\nAgreement, PeoplePC shall not attempt to cause the removal of the PeoplePC\nidentification or Trademarks from any Customer's checks or records existing as\nof the effective date of the termination of this Agreement\n\n14.  LIMITATION OF LIABILITY\n\nIN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECULATIVE,\nINDIRECT, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOST\nPROFITS OR LOST REVENUE, EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH\nDAMAGES, IN CONNECTION WITH PERFORMANCE UNDER THIS AGREEMENT.\n\n\n15.  MISCELLANEOUS\n\n(a)  This Agreement cannot be amended except by written agreement signed by the\nauthorized agents of both parties hereto.\n\n(b)  The obligations in Sections 2 (only with regard to PeoplePC's obligation to\npay a discount to MBNA for Loan Accounts approved at approximately 10.95%);\n3(b), 4(c), 5, 7, 10, 11, 12, 13(d), 13(e), and 14 shall survive any termination\nof this Agreement.\n\n(c)  The failure of any party to exercise any rights under this Agreement shall\nnot be deemed a waiver of such right or any other rights.\n\n(d)  The section captions are inserted only for convenience and are in no way to\nbe construed as part of this Agreement.\n\n(e)  If any part of this Agreement shall for any reason be found or held invalid\nor unenforceable by any court or governmental agency of competent jurisdiction,\nsuch invalidity or unenforceability shall not affect the remainder of this\nAgreement which shall survive and be construed as if such invalid or\nunenforceable part had not been contained herein.\n\n(f)  All notices relating to this Agreement shall be in writing and shall be\ndeemed given (i) upon receipt by hand delivery, facsimile or overnight courier,\nor (ii) three (3) business days after mailing by registered or certified mail,\npostage prepaid, return receipt requested. All notices shall be addressed as\nfollows:\n\n \n(1) If to PeoplePC:                       (2) If to MBNA:\n                                                    \n        PeoplePC, Inc.                           MBNA America Bank, N. A.\n        100 Pine Street, Suite 1100              400 Christiana Road, MS 1522\n        San Francisco, CA 94108                  Newark, Delaware 19713\n        Attention:  Dan Kohler                   Attention:  Ann Balthis\n        Title  Chief Operating Officer           Title:  Director, Sales Finance\n        Fax #: (415) 837-3857                    Fax #:  (302) 458-3516\n\nAny party may change the address to which communications are to be sent by\ngiving notice, as provided herein, of such change of address.\n\n(g)  This Agreement contains the entire agreement of the parties with respect to\nthe matters covered herein and supersedes all prior promises and agreements,\nwritten or oral, with respect to the matters covered herein. Without the prior\nwritten consent of MBNA, which shall not be unreasonably withheld, PeoplePC may\nnot assign any of its rights or obligations under or arising from this\nAgreement. MBNA may assign or transfer its rights and\/or obligations under this\nAgreement without the written consent of PeoplePC, and shall give PeoplePC\nnotice of any such assignment or transfer.\n\n(h)  MBNA and PeoplePC are not agents, representatives or employees of each\nother and neither party shall have the power to obligate or bind the other in\nany manner except as otherwise expressly provided by this Agreement.\n\n(i)  Nothing expressed or implied in this Agreement is intended or shall be\nconstrued to confer upon or give any person other than PeoplePC and MBNA, their\nsuccessors and assigns, any rights or remedies under or by reason of this\nAgreement.\n\n(j)  Neither party shall be in breach hereunder by reason of its delay in the\nperformance of or failure to perform any of its obligations herein if such delay\nor failure is caused by strikes, acts of God or the public enemy, riots,\nincendiaries, interference by civil or military authorities, or compliance with\ngovernmental laws, rules, regulations.\n\n(k)  This Agreement may be executed in two or more counterparts, each of which\nshall be deemed an original, but all of which together shall constitute one and\nthe same instrument.\n\n \nIN WITNESS WHEREOF, each of the parties, by its representative, has executed\nthis Agreement as of the Effective Date.\n\n     MBNA AMERICA BANK, N.A.                     PEOPLEPC, INC.\n\nBy:       \/s\/ Thomas W. Horne              By:       \/s\/ Nick Grouf\n                                                   \nName:     Thomas W. Horne                  Name:     Nick Grouf\n                                                   \nTitle:    SEVP                             Title:    CEO\n                                                   \nDate:     February 29, 2000                Date:     February 29, 2000\n\n \n                                  SCHEDULE A\n\nTERMS AND FEATURES\n\nSubject to (i) MBNA's right to vary the Program and its terms and features, and\n(ii) the applicable agreement entered into between MBNA and each Customer:\n\nLOAN ACCOUNTS\n\n     1.   There is no annual fee. \n\n     2.   The current APR may be as low as approximately 10.95%; individual\n          customers may receive a higher rate up to 26.99% depending on income\n          and creditworthiness.\n\n     3.   The accounts may be used for any bona fide purpose, except it cannot\n          be used solely to payoff or paydown another MBNA account.\n\n     4.   Additional advances may be requested at any time.\n\n     5.   Customers may be offered other benefits under the Program, such as\n          credit insurance and travel services. \n\n \n                                  SCHEDULE B\n\n                             FINANCIAL ARRANGEMENT\n\nI.  Phase 1 Discount: For all Customers approved by MBNA at an APR of\napproximately  10.95%, PeoplePC shall subsidize the APR with a discount to MBNA\nas follows:\n\n     [*] of the total U.S. Dollar amount of the initial PeoplePC Product\n          purchase(s) made by Customers directly to Loan Accounts and processed\n          via deposit into the Settlement Account.\n\nII. Standard Discount: For all Customers approved by MBNA at an APR of\napproximately 10.95%, PeoplePC shall subsidize the APR with a discount to MBNA\nas follows:\n\n     An amount calculated by subtracting [*] from the Prime Rate (as published\n     in The Wall Street Journal on the last day of the preceding calendar\n     quarter) multiplied by the total U.S. Dollar amount of the initial PeoplePC\n     Product purchase(s) made by Customers directly to Loan Accounts and\n     processed via deposit into the Settlement Account.  If the Prime Rate drops\n     to or below [*], then during each such time that the Prime Rate is at or\n     below [*], PeoplePC's obligations to pay a discount to MBNA as set forth\n     above shall be suspended.\n\n\n\n\n\n*****Certain information on this page has been omitted and filed with the\n     Securities and Exchange Commission. Confidential treatment has been\n     requested with respect to the omitted portions.\n\n \n                                  SCHEDULE C\n\n               SETTLEMENT INFORMATION for all ACH transmissions\n\n\n\nName of Account Holder:    ______________\n\nName of Bank:              ______________\n\nAccount #:                 ______________\n\nABA #:                     ______________\n\n \n                                  SCHEDULE D\n\n            Attach IRS Form W-9 which has been executed by PeoplePC\n\n \n                                   EXHIBIT 1\n\n\nCapitalized but undefined terms used on this Exhibit 1 shall have the meanings\ngiven them in the relevant documentation between PeoplePC and each Member.\n\nPart 1\n\nPolicy Statement\n\nPeoplePC will protect customers from entry and use of fraudulent information by\nother individuals.\n\nPolicy Guidelines\n\nCustomer information that is collected for membership application will be\nverified at several points in the application process.\n\nProcess\n     1.   Customer credit information (Name, Address, social security, employer,\n          annual income) will be used to run a credit check for customers\n          applying for the PeoplePC Monthly Payment Plan. This will serve as\n          verification that the person whose information was submitted for\n          application is the person who applied for membership. If the credit\n          check fails, the customer information will not be processed for the\n          monthly membership plan.\n     2.   Upon delivery a signature is required and captured by the delivery\n          service to be used for verification that the order was received by the\n          appropriate person.\n\n\nPart 2\n\nPolicy Statement\n\nPeoplePC will protect customer information that is resident in the PeoplePC\nsystems.\n\nPolicy Guidelines\n\nAccess to the system housing member information will be limited and regulated.\n\nProcedure\n     1.   All call center representatives and PeoplePC employees must have a\n          certificate installed on their desktop computer in order to access the\n          PeoplePC OrderSupport system.\n     2.   Change made to member records in the Order Support Site are updated in\n          the PeoplePC database.\n\n \n     3.   Distribution center employees do not have direct access to the\n          PeoplePC OrderSupport System. Their access to information is through\n          the distribution center system. Only name, address, and member number\n          are available.\n     4.   Returns to PeoplePC are regulated by the distributor and PeoplePC\n          Headquarters. Returns are not accepted without an RMA and credits for\n          returned systems are not given without verification that the system\n          has been received.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8157,8486],"corporate_contracts_industries":[9415,9497],"corporate_contracts_types":[9613,9620],"class_list":["post-42765","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-mbna-corp","corporate_contracts_companies-peoplepc-inc","corporate_contracts_industries-financial__banks","corporate_contracts_industries-retail__electronics","corporate_contracts_types-operations","corporate_contracts_types-operations__services"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42765"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42765"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42765"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}