EXHIBIT 10.4
JOINT MARKETING AGREEMENT
JOINT MARKETING AGREEMENT, dated as of _________, 1998 (this "Agreement"),
by and between Creative Computers, Inc., a Delaware corporation ("CCI"), and
uBid, Inc., a Delaware corporation ("uBid").
WHEREAS, uBid is currently a wholly-owned subsidiary of CCI;
WHEREAS, CCI and uBid have undertaken certain joint advertising and
marketing efforts relating to their respective businesses;
WHEREAS, uBid is considering an initial public offering of its Common Stock
("IPO");
WHEREAS, after the IPO, CCI will own approximately 80.1% of the outstanding
shares of uBid's Common Stock (the "Retained Shares");
WHEREAS, subject to the conditions set forth in the Separation and
Distribution Agreement, dated as of _________________, 1998, by and between CCI
and uBid, CCI will distribute to its stockholders, not earlier than six months
following the IPO, all of the Retained Shares in a tax-free distribution (the
"Distribution"); and
WHEREAS, after the IPO, uBid and CCI desire to continue such joint
advertising and marketing efforts in accordance with the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises and
representations contained herein, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto do mutually
covenant, stipulate and agree as follows:
Section 1. Joint Advertising and Marketing Efforts.
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(a) uBid shall continue (i) to appear constantly on at least a
quarter (1/4) of the home page of CCI's "PC MALL" website, and (ii) to be the
subject of a continuing banner advertisement on the home page of CCI's "PC MALL"
website. CCI and uBid specifically agree that the form, content and design of
any and all advertisements featuring uBid shall continue to be developed by or
on behalf of uBid and shall be subject to uBid's final approval.
(b) CCI shall have the benefit of a "click through" from the home
page of uBid's website to CCI's "PC MALL" website.
Section 2. Compensation.
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In addition to the consideration to CCI provided for in Section 1(b)
above, uBid shall pay CCI a monthly fee of $10,000 for the advertising and
marketing services described in Section 1(a) above (such fee to be paid no later
than thirty (30) days after the close of each month during the term of this
Agreement) or CCI, in CCI's sole discretion, may elect to receive a banner
advertisement on each page of the uBid Website in lieu of such monthly fee. The
form,
content and design of any such banner advertisement shall be designed by or on
behalf of CCI and shall be subject to CCI's final approval
Section 3. Term.
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The initial term of this Agreement shall commence on the date hereof
and shall continue for a period of one year unless earlier terminated by either
party upon sixty (60) days prior written notice.
Section 4. Mutual Covenant as to Banner Advertisements.
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Each of CCI and uBid hereby covenant and agrees that their
respective banner advertisements provided for herein shall at all times comply
with all applicable laws, rules and regulations and will not contain any
material which is obscene, threatening, fraudulent, harassing, libelous,
infringing of third party intellectual property rights, otherwise illegal or, in
the reasonable judgment of the party required to display the advertisement,
offensive.
Section 5. Exclusivity.
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During the term of this Agreement (a) CCI shall not sell any banner
space to any other online auction site or otherwise permit any other online
auction service to advertise on any of CCI's websites, and (b) uBid shall not
sell any banner space to or otherwise permit any business in direct competition
with CCI to advertise on any of uBid's websites.
Section 6. Miscellaneous.
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(a) This Agreement may not be transferred or assigned by either
party, whether voluntarily or by operation of law, without the prior written
consent of the other. This Agreement shall inure to the benefit of and be
binding upon all permitted successors and assigns.
(b) This Agreement shall be governed by the laws of the State of
California (regardless of the laws that might otherwise govern under applicable
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, construction, effect, performance and remedies.
(c) This Agreement may be executed in counterparts, each of which
shall constitute an original and both of which together shall be deemed to be
one and the same instrument.
(d) All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or by facsimile
transmission or mailed (certified or registered mail, postage prepaid, return
receipt requested):
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If to CCI, to: Creative Computers, Inc.
0000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
If to uBid: uBid, Inc.
0000 Xxxxx Xxxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
or to such other person or address as any party shall specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date on which hand
delivered, upon transmission of the facsimile transmission by the sender and
issuance by the transmitting machine of a confirmation slip confirming that the
number of pages constituting the notice have been transmitted without error, or
on the third business day following the date on which so mailed, except for a
notice of change of address, which shall be effective only upon receipt thereof.
In the case of a notice sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received. In no event shall the provision
of notice pursuant to this Section 6(d) constitute notice for service of
process.
(e) This Agreement contains the entire understanding of the parties
hereto with respect to its subject matter. This Agreement supersedes all prior
agreements and understandings, oral or written, with respect to its subject
matter.
(f) In the event that any one or more of the provisions contained
herein is held invalid or unenforceable in any respect, the parties shall
negotiate in good faith with a view toward substituting therefor a suitable and
equitable solution in order to carry out the intent and purpose of such invalid
provision; provided, however, that the validity and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
(g) The Section headings contained in this Agreement are for
reference only and shall not affect the meaning or interpretation of this
Agreement.
Section 7. Arbitration.
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Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or validity hereof, or any transaction
contemplated hereby shall be settled in accordance with the procedures set forth
in Article VIII of the Separation and Distribution
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Agreement, dated as of _________, 1998, by and between CCI and uBid, as if such
Article VIII were set forth herein in its entirety.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
CREATIVE COMPUTERS, INC.
By:_____________________________________
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board,
President and Chief Executive Officer
uBID, INC.
By:_____________________________________
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
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