EXHIBIT 10.1
Confidential Treatment Requested
Carrefour and XxxxxxxxXxxx.xxx, Inc.
Letter Agreement
XxxxxxxxXxxx.xxx, Inc. (SourcingLink) desires to enter into an
agreement with Carrefour relating to the adoption by Carrefour of SourcingLink's
Internet Merchandise Sourcing Solution and continued use of the SourcingLink
desktop quality inspection and shipping and tracking solution. The significant
terms and conditions of the agreement are outlined below.
1. Overview
Carrefour as a strategic partner to SourcingLink is interested in
enabling a more efficient supply chain connection and process between its
worldwide suppliers and Carrefour. To facilitate this goal, Carrefour has asked
SourcingLink to deliver an e-commerce solution allowing Carrefour to efficiently
and cost effectively communicate with and manage its suppliers worldwide.
The Solution will allow Carrefour to establish the necessary
connectivity infrastructure to efficiently distribute business information to
its suppliers and have suppliers feed information into Carrefour's systems using
standard web browsers to access the Solution over the Internet. The SourcingLink
Solution will provide Carrefour with a variety of standardized electronic
communication capabilities to exchange information with its suppliers including
electronic supplier profiles, negotiations, sending and receiving requests for
quotation, product development, sharing product catalogs, publishing vendor
policies and procedures, sending purchase orders and invoices, receiving
shipment notices, placing inspection orders and receiving inspection reports.
Carrefour understands that in order to implement this solution it must
mandate its suppliers to subscribe to the SourcingLink Solution.
SourcingLink will provide Carrefour a leading edge, cost-efficient
supply chain management solution and will work closely with Carrefour to develop
and implement additional functionality across these connections over time.
SourcingLink and Carrefour understand and agree that continued use of
the SourcingLink Solution is based on Carrefour's on-going satisfaction and use
of this Solution can be terminated by Carrefour for any reason with ninety (90)
days prior written notice.
2. Roll Out Scope
Carrefour has indicated that providing its CMI offices with an e-
commerce solution to transmit sourcing information from the international
suppliers to the buyers in the operating countries is the first priority in the
implementation plan. Based on this desire, SourcingLink will structure its
implementation into distinct phases focusing immediately on connecting the CMI
offices in Hong Kong, Italy and Mexico, to their suppliers and to the buyers in
the operating countries.
It is anticipated that after linking the international suppliers to
its CMI offices, Carrefour will extend usage of the SourcingLink Solution to
include mandating the domestic suppliers in each operating country to subscribe
to the SourcingLink Solution.
Phase One - January 1, 2000 - May 31, 2000
Aggressively roll out the SourcingLink Solution to the international
suppliers, the CMI offices and the buyers in each of the operating countries:
. Work with Carrefour to document the current sourcing workflow.
. Connect the three (3) CMI offices, their suppliers and their main
operating country customers (France, Spain, Argentina, Brazil,
Taiwan...others) to the SourcingLink Solution through a fast
Internet connection.
. Customize the forms with the SourcingLink Solution to support the
product catalog document workflow from the suppliers through CMI
and then to the operating countries.
. Publish purchasing policies and procedures provided by Carrefour
for international suppliers.
. Develop and interface between SourcingLink and the Carrefour back
office system(s) to enable the automatic transfer of information,
where required.
. Install a supplier relations button on the Carrefour website with
a hotlink to SourcingLink.
Phase Two - June 2000 - June 2001
Extend the SourcingLink Solution to link the buyers in the operating countries
with their domestic suppliers:
. Connect the various operating country buyers with their domestic
suppliers (order of operating country roll out to be agreed upon
with Carrefour).
. Customize forms within the SourcingLink Solution to support the
product catalog workflow from the domestic suppliers to the
various operating country buyers.
. Publish purchasing policies and procedures provided by Carrefour
for domestic suppliers.
Phase Three - Starting date and priorities to be agreed upon with Carrefour
In order to fully utilize the existing connectivity, Carrefour and
SourcingLink will work cooperatively to add and enhance features between
Carrefour and both its international and domestic suppliers
. Include web based Order Management related documents in the
workflow with the suppliers.
. Broadcast information to vendors on a one-to-one basis, e.g.,
inventory status, faulty deliveries.
. Develop the corresponding interface between SourcingLink and the
Carrefour back office system(s) to enable the automatic transfer
of the necessary information, where required.
. Provide agreed upon additional functionality to the SourcingLink
Solution
Carrefour will be responsible to put in place the infrastructure necessary
to implement the SourcingLink Solution to include fast Internet connection and
machines in each of the buying offices for the buyers/merchandisers to access
the Internet. In addition, Carrefour will need to appoint a corporate project
manager and a project manager in each operating country to act as the interface
to the SourcingLink project management teams to support the implementation of
the Solution.
3. Implementation Process
. We will jointly document the current workflow.
. We will jointly develop the project plan with tasks,
responsibilities and milestones for each phase of the roll out.
. SourcingLink will provide the Buyer training in all CMI and
Operating countries and Carrefour will make buyers available for
all training.
. SourcingLink will provide forms customization for current
international product catalog documents used by the CMI offices
and the operating countries.
4. Responsibilities -- SourcingLink
. Training
. SourcingLink will assign a worldwide Project Manager to serve as
the owner of the Carrefour implementation worldwide.
. SourcingLink will assign a project manager for each country
implementing the SourcingLink Solution (a project manager may
handle multiple countries).
. SourcingLink will develop with Carrefour a project plan and
review its progress and the key deliverable items on a regular
basis with Carrefour Corporate Project management as well as each
of the countries in active implementation.
. SourcingLink will identify and raise project issues as necessary
with Carrefour appointed project management
. SourcingLink will provide forms customization
. SourcingLink will provide worldwide support through its Solution
center to buyers and suppliers
. SourcingLink will provide support for interface developments for
connection to ERP and/or other back-office systems
. Supplier recruiting through telemarketing.
Responsibilities Carrefour
. Carrefour will mandate that supplier subscribe to the
SourcingLink Solution.
. Carrefour will provide connectivity to the Internet.
. Carrefour will make buyers available for training.
. Carrefour will assign a Corporate Project Manager who will be the
focal point for communications and who has the authority to act
for Carrefour in all aspects related to this proposal.
. Carrefour will appoint a project manager in each roll out country
with access to necessary personnel and information at Carrefour
related to the successful completion of the implementation.
. Carrefour will work to establish, develop and approve all forms
customization.
. Carrefour will provide office space to SourcingLink at Carrefour.
. Carrefour will provide supplier listings and approve sending
letters to the suppliers on Carrefour letterhead and provide
buyer follow-up to recruit suppliers.
. Carrefour will develop the necessary interface between the
SourcingLink Solution and its ERP and other back office systems.
. Carrefour will implement buying practices and procedures that
reinforce utilization of the SourcingLink Solution.
5. Initial Implementation - Phase One
The project start date is estimated to be December 1 and is subject to
final agreements between Carrefour and SourcingLink that fully reflect the
detail terms related to this memorandum of understanding.
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Task Description Estimated Start Date
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Receipt of memorandum of understanding - Carrefour November 12, 1999
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Agreement signed by Carrefour Head Office November 12, 1999
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Meet with CMI offices to: January 4, 2000-January 15,
. Develop project plan 2000
. Document workflow
. Obtain supplier target lists
. Schedule buyer training
. Agree upon date to send letters to suppliers
. Check on Internet connectivity
. Establish working group for form customization
. Establish working group for policies and procedures
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Meet with operating countries to: January 22, 2000
. Check on Internet connectivity
. Schedule buyer training
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Standard agreements signed January 31, 2000
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Carrefour starts sending letters to international suppliers February 15, 2000
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6. Internet Solution
Charges
. $95 per month per buyer trained on the Solution and provided a user ID
[*]. Payable monthly upon receipt of invoice.
. One time roll out fees estimated at US$450,000 (450 man days at an
average of US$1,000). This includes 200 days of buyer training, 200
days of project management and 50 days of sourcing forms
customization.
. Total estimated one-time fees above: US$450,000. Payable as services
are provided and billed.
. Estimates will be confirmed with final project plans.
. All billing will be payable by Carrefour corporate.
Not Included
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. Man-days in excess of estimate
. Our travel expenses will be invoiced at cost.
. Additional functionality requiring development.
. Any projects to interface to Carrefour back office systems will be
subject to a separate proposal.
. Additional forms customization for forms currently not in use by
Carrefour will be subject to a separate proposal.
. Data migration.
Suppliers will pay a registration fee of $100 and $95 per month per seat or
$1,025 per year per seat. [*]
7. Warrants
SourcingLink will grant to Carrefour 150,000 warrants for the purchase
of 150,000 shares of SourcingLink common stock at an exercise price equal to the
closing price of the SourcingLink stock as of the date this agreement is signed
by both parties. [*]
These warrants are granted in consideration of the commitment to this
alliance by Carrefour and contemplate that Carrefour will actively participate
in the implementation.
* Portions omitted pursuant to a request for confidential treatment.
8. Supplier Confidentiality
SourcingLink agrees that any supplier that has an exclusive
relationship with Carrefour or provides private lable goods to Carrefour will
remain private in the SourcingLink database and will not be accessible to any
retailer other than Carrefour.
9. Other
Carrefour will become a Charter member participating in the
development of the direction and content of the SourcingLink Solution. In
addition, Carrefour will be showcased on our public site as a Charter member
with a description of our alliance and your leadership role in e-commerce.
Carrefour will agree to public disclosure of the business relationship
and the plans for implementation and to act as a reference site and showcase for
investors, non-competitive retailers, and suppliers.
It is understood that Carrefour has acquired Promodes. Upon completion
of the integration phase of this acquisition, SourcingLink agrees to consolidate
agreements in affect at that date where the terms of the Carrefour agreement
will prevail.
CARREFOUR XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxxx Xxxx X. Xxxxx
Chief Merchandise and Marketing President and Chief Executive
Officer Officer
Date: December 8, 1999 Date: December 8, 1999
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