EXHIBIT 10.15
Xxxxxx Micro Inc.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
June 1, 2000
Xxx Xxxxxx
Chief Operating Officer
PeoplePC, Inc.
000 Xxxx Xxxxxx, Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: PeoplePC/Ford Beta Roll-out;
Delta Beta Roll-out
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Dear Xxx:
This Letter of Understanding ("XXX") is executed by and between Xxxxxx
Micro Inc. ("Ingram") and PeoplePC, Inc. ("PeoplePC") as of the date set forth
above. This XXX 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 XXX 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 Xxxxxx.
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 Xxxxxx 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 XXX.
Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as [*]. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.
Xxxx Xxxxx
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 [*].
As used in this XXX, [*]. Additionally, PeoplePC shall pay to Ingram a labeling
charge of [*] 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 Xxxxxx'x obligations under
this XXX, 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 XXX 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 XXX.
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 [*] 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 XXX while such Products are in Xxxxxx'x possession
or under Xxxxxx'x control. Ingram will carry casualty insurance coverage
covering such Products while in Xxxxxx'x possession or under Xxxxxx'x control in
amounts that are commercially reasonable.
*****Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Xxxx Xxxxx
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 [*] per CPU, [*] per monitor, and [*] 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
Xxxxxx'x 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 XXX.
10. Terms of Sale. The Products sold hereby are subject to Xxxxxx'x
standard terms and conditions of sale as published on its website at
xxx.xxxxxxxxxxx.xxx. However, to the extent that any of the terms and
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conditions of this XXX conflict with Xxxxxx'x standard terms and conditions of
sale, the terms and conditions stated in this XXX 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 Xxxxxx'x standard terms
and conditions of sale.
11. Reservation of Rights; No Waiver or Compromise. Nothing in this XXX
or the transaction contemplated hereby shall in any way limit or affect People
PC and Xxxxxx'x 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 XXX or the transaction contemplated
hereby.
12. Entire Agreement. This XXX and Xxxxxx'x standard terms and conditions
of sale represent the entire agreement between Xxxxxx Micro and PeoplePC
concerning the subject matter of this transaction. This XXX supersedes all prior
understandings and communications on the subject matter of this transaction,
whether oral or written. This XXX may only be modified by a writing executed by
an authorized representative of Xxxxxx Micro and of PeoplePC. Nothing in this
XXX 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/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Vice President
*****Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Xxxx Xxxxx
June 1, 2000
Page 4
Accepted this day of May 2000.
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PeoplePC, Inc.
By: /s/ Xxx Xxxxxx
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Xxx Xxxxxx
