CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.3
e-NITED
business solutions(R)
SUPPLIER AGREEMENT
This Supplier Agreement (this "Agreement") is made by and between e-NITED
business solutions, a division of United Stationers Supply Co. an Illinois
corporation having a principal place of business at 0000 Xxxx Xxxx Xxxx, Xxx
Xxxxxxx, Xxxxxxxx 00000-0000 ("e-NITED" or "Supplier"), and Xxx.xxx, a Delaware
corporation having a principal place of business at 00 Xxxxxxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Reseller"), and shall be effective as of this 13th day
of June, 2000 ("Effective Date").
WHEREAS Supplier is the wholesale distributor of certain products,
including office supplies, computer consumables, and cleaning supplies;
WHEREAS Reseller owns and operates one or more Internet web sites having
the URL xxx.xxx.xxx (collectively, the "Web Site") wherein Reseller displays and
makes available for sale certain consumer products; and
WHEREAS Reseller desires to purchase Supplier's products that are listed on
Supplier's Electronic Catalog Database (provided under separate cover) to
Reseller's Consumers (the "Consumers"), and Supplier wishes to fulfill Consumer
orders for the Products by delivering such to the Consumers.
NOW THEREFORE, in consideration of the mutual promises, covenants, and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1. Purchase of Products. The Parties agree that Consumers shall order
--------------------
Products directly from the Web Site and Reseller shall act as the merchant and
collect all payments for the Products from the Consumers. According to the terms
and conditions set forth herein, Reseller shall purchase from Supplier the
Products ordered by Consumer and Supplier shall be responsible for fulfilling
such Consumer orders by delivering the Products to the Consumer in North America
(U.S. and Canada). Such distribution and fulfillment shall be performed
according to the terms of this Agreement and Reseller's Operations Manual
attached hereto as Exhibit B (The "Operations Manual").
2. Pricing. Except as otherwise provided in this Agreement, initial
-------
pricing terms for each Product will be provided via Price File Download and are
subject to change. The Parties agree that Supplier may change prices from time
to time, without notice. Pricing updates will become effective when they have
been communicated to Reseller. Reseller should download pricing updates daily
from the FTP (File Transfer Protocol) site of Supplier. The Parties agree that
pricing for the Products is based upon the assumption that Reseller will achieve
an annualized purchase volume of [***] from Supplier (the "Target"). In the
event that Reseller is
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
not on track to achieve the Target within [***] of the Effective Date, Supplier
reserves the right to either (i) renegotiate the pricing terms as set forth in
Exhibit A to mutually acceptable terms or (ii) terminate this Agreement in
accordance with Paragraph 11 herein. Reseller may refuse to sell, or
discontinue, the sale of any Product in its sole discretion, however, such
refusal or discontinuance shall not modify the Target unless otherwise agreed
upon in writing by both Parties. Reseller is responsible for setting its own
prices for the sale of each product to Consumers.
3. Reseller Orders. The Parties agree that an integrated electronic data
---------------
interchange system (the "EDI system") will be used as the primary method of
order processing pursuant to the Operations Manual. Supplier may add a handling
charge of [***] per order to any order which does not comply with electronic
order provisions of Exhibit A. In the event of its electronic systems failure,
Supplier shall accept and process telephone and fax orders without additional
charge.
Supplier shall assign, via postal zip code, all orders received from
Reseller to the nearest United shipping facility. All orders received into
Supplier's system by [***] in the time zone of the assigned shipping facility
will be shipped from Suppliers facility on the same day, but in the event
Supplier's initially assigned facility cannot complete or fulfill the order,
Supplier's system will search the next closest facility and ship the Products to
the Consumer on the same day the order is received, assuming that the item is
available in stock. An order which is improperly transmitted or an order for
out of stock merchandising is automatically cancelled. Supplier shall provide
backorder support according to the terms of the Operations Manual.
In the event Supplier believes that it cannot fulfill, either in whole or
in part, a Consumer's order for a Product, Supplier shall notify Reseller within
2 hours of receipt of such order from Reseller of Supplier's inability to
deliver the ordered Product(s) to the Consumer and such order for an out of
stock item will be deemed cancelled. Reseller will be responsible for notifying
Consumer.
4. Distribution/Delivery. Supplier shall use its nation-wide express
---------------------
delivery system to deliver Products to the Consumer. Reseller agrees that all
shipments from Supplier to Consumer may bear Reseller's indicia including, but
not limited to, Reseller's trademarks, tradenames, logos and any source
identifiers Reseller may adopt from time to time and Reseller hereby grants
Supplier limited revocable license to use Reseller's indicia for such shipments.
No Supplier indicia will be used.
5. Payment/Adjustments. Reseller shall pay Supplier for Products ordered,
-------------------
handling charges, and shipping fees in accordance with the terms and conditions
of Exhibit A.
6. Returns. All requests for Product returns, repairs, or replacements
-------
shall be directed to Reseller and shall be subject to Reseller's return policy.
All requests for Product returns to Supplier are subject to the terms and
conditions in Exhibit A and must include a Return Authorization Number provided
by United.
2
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
7. Ownership of Information. Reseller shall own all information concerning
------------------------
or relating to a specific Consumer who completes an online order form to
Reseller from the Web Site (the "Consumer Information"). Such information and
data shall not be provided or disclosed to Supplier except as reasonably
necessary to perform its obligations under this Agreement and may be used by
Supplier only as reasonably necessary to perform its obligations under this
Agreement and for no other purpose.
8. Limited Warranty. Each Party represents and warrants that: (a) it has
----------------
all necessary authority to enter into this Agreement and (b) the rights it has
granted hereunder do not breach any other agreement to which it is a Party or by
which it is bound. Reseller acknowledges that the Products are distributed by
Supplier and not manufactured by Supplier, but are manufactured by entities for
whom Seller acts as a distributor and/or reseller. Supplier represents that the
manufactures and vendors of the products do not prohibit Reseller from allowing
the resale of such products via the Internet; that it has the rights and
licenses necessary to permit marketing, resell, and distribution of the
products; that the Product Information (as set forth in section 9.2 of the
Operations Manual) and the Product Database (as set forth in section 9.1 of the
Operations Manual) as delivered to Reseller shall not infringe any intellectual
property rights or violate any law, statute, ordinance, or regulation; or
contain any inaccuracies with regard to the descriptions, prices and
availability of the products; and that the products shall be free and clear of
any liens or encumbrances. Furthermore, this limited warranty and any liability
hereunder shall not exceed the warranty provided by the manufacturer of the
Products. ALL WARRANTIES FOR THE PRODUCTS ARE SUBJECT TO AND LIMITED BY AND TO
ANY WARRANTIES PROVIDED BY THE MANUFACTURER(S) OF ANY OF THE PRODUCTS. THE
FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES EXCEPT THOSE, IF ANY,
SUPPLIED BY THE MANUFACTURER OF THE PRODUCTS, EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. This is a limited warranty and supersedes all other
warranties. The remedies provided herein are the Reseller's exclusive remedies
for breach of this warranty and shall be the sole liability of Supplier for a
breach of this warranty. IN NO CASE SHALL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES BASED UPON BREACH OF
WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT TORT, OR ANY OTHER LEGAL
THEORY, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF SAVINGS OR
REVENUES, LOSS OF USE OF ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF ANY
SUBSTITUTE EQUIPMENT, FACILITIES OR SERVICES, DOWNTIME, THE CLAIMS OF THIRD
PARTIES, INCLUDING CONSUMERS OR SUPPLIERS, AND INJURY TO PROPERTY.
9. Indemnity. Supplier and Reseller shall indemnify and hold harmless the
---------
other from any and all liabilities, damages, and expenses of any nature,
including reasonable attorneys fees and costs, arising out of or relating to any
action instituted by any third party for the other party's breach or alleged
breach of representations and warranties, omissions, or misrepresentations
regardless of the form of action except where such resulted from the
3
negligence or willful misconduct of the party seeking indemnification. Supplier
and Reseller shall indemnify and hold the other party harmless from any and all
liabilities, damages and expenses of any nature, including reasonable attorneys
fees and costs, for claims alleged against either party based on improper use or
misuse of Reseller's or Supplier's trademarks, tradenames, or logos as specified
in this Agreement except where such resulted from the negligence or willful
misconduct of the party seeking indemnity.
10. Confidential Information. Each party acknowledges and agrees that any
------------------------
information relating to the other Party's business, individual customer
information, products, or methods of operation, which is not generally known to
the public, is confidential and proprietary information of the other Party (the
"Confidential Information"). Each Party agrees that it shall not disclose
Confidential Information of the other Party except to its agents who need to
know such Confidential Information in order to perform its obligations under
this Agreement. Each Party agrees that it shall not use Confidential Information
of the other Party except to perform its obligations under this Agreement. The
foregoing obligations shall not apply to Confidential Information that (a) is or
becomes part of the public domain through no fault of the receiving party; (b)
is lawfully received from a third party without an obligation of
confidentiality; (c) is independently developed by the receiving party without
reference to the Confidential Information of the other party; or (d) is required
to be disclosed by applicable law. Notwithstanding the foregoing, each party may
request and receive approval in writing from the other party to disclose to the
public that it has entered into an agreement with the other party (without
disclosing pricing and other nonpublic details), and that the Products are being
sold on the Web Site.
11. Term and Termination. This Agreement is effective for one (1) year
--------------------
from the Effective Date (the "Term") unless sooner terminated by either Party
with ninety (90) days prior written notice to the other Party. This Agreement
shall automatically renew for one (1) additional year, unless ninety (90) days
prior to the expiration of any Term, notice of election not to renew is provided
in writing by either Party to the other Party.
12. Miscellaneous.
-------------
a. Independent Parties. The relationship between Supplier and
-------------------
Reseller is, and at all times shall remain, solely that of independent
parties, and shall not be, or construed to be a joint venture, partnership,
fiduciary, or other relationship of any nature.
b. Notices. Any notice, report, or statement required or permitted
-------
under this Agreement will be considered to be given or transmitted when sent
by certified mail, postage prepaid, addressed to the Party for whom it is
intended at its address of record; by facsimile, which notice will be
effective on computer confirmation of receipt, or by courier or messenger
service, which notice will be effective on receipt by recipient as indicated
on the courier's receipt. The record addresses of the Parties are as follows:
4
e-NITED business solutions
000 Xxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000-0000
Attention: Xxxx X'Xxxxxxxx
With a copy to:
United Stationers Supply Co.
0000 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: General Counsel
Reseller: Xxx.xxx
00 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
c. Amendment. This Agreement may be supplemented, amended, or
---------
modified only by the mutual agreement of the Parties. No supplement,
amendment, or modification of this Agreement will be binding unless it is in
writing and signed by both Parties.
d. No Waiver. No waiver of a breach, failure of any condition, or any
---------
rights or remedy contained in or granted by this Agreement will be effective
unless it is in writing and signed by the Party waiving the breach, failure,
right, or remedy. No waiver of any breach, failure, right, or remedy will be
deemed a waiver of any other breach, failure, right, or remedy, whether or not
similar, nor will any waiver constitute a continuing waiver unless the writing
so specifies.
e. Attorney Fees. In any litigation, arbitration, or other proceeding
-------------
by which one Party either seeks to enforce its rights under this Agreement
(whether in contract, tort, or both) or seeks a declaration of any rights or
obligations under this Agreement, the prevailing Party will be awarded
reasonable attorney fees, together with any costs and expenses, to resolve the
dispute and to enforce the final judgment.
f. Governing Law. This Agreement, and any dispute arising from the
-------------
relationship between the Parties to this Agreement, shall be governed and
determined by Illinois State law. The parties agree that where practicable a
senior executive of each will meet in person in a good faith attempt to settle
any dispute before filing any legal action.
g. Severability. Any provision of this Agreement that in any way
------------
contravenes the law of any state or country in which this Agreement is
effective will, in that state or country, to the extent the law is
contravened, be considered separable and inapplicable and will not affect any
other provision or provisions of this Agreement.
5
h. Assignment. Neither Party shall have the right to assign any of
----------
its rights or obligations under this Agreement without the prior written
consent of the other Party; except that the parties shall have the right to
assign its rights and obligations, in whole or in part, to any corporation
controlled by, controlling or under common control with the parties or to any
third Party which acquires all, or substantially all, of the assets of the
parties.
i. Integration. This Agreement, and any and all Exhibits attached
-----------
hereto and made a part hereof, constitutes the final, complete, and exclusive
statement of the terms of this Agreement between the Parties pertaining to the
subject matter of this Agreement and supersedes all prior and contemporaneous
understandings or agreements of the Parties. No Party has been induced to
enter into this Agreement by, nor is any party relying on, any representation
or warranty outside those expressly set forth in this Agreement.
j. Interpretation. This Agreement shall be interpreted in accordance
--------------
with its plain meaning and shall not be interpreted against the drafting
Party.
k. Captions. The captions and headings contained in this Agreement
--------
are for convenience only and shall not control the meaning, effect, or
construction of the Agreement.
l. Independent Counsel. All Parties to this Agreement have read the
-------------------
Agreement and have had the opportunity to consult with independent counsel
prior to executing the Agreement.
m. Force Majeure. Neither Party shall be responsible to the other
-------------
Party for any failure to comply with the terms of this Agreement due to causes
beyond its reasonable control; provided, however, that no such cause shall
excuse Reseller from paying amounts due and outstanding to Supplier.
INTENDING TO BE LEGALLY BOUND, the Parties have executed this Agreement to
be effective as of the Effective Date.
Reseller: e-NITED business solutions a division of
United Stationers Supply Co.
By: By:
-------------------------------- --------------------------------
Its: Its:
------------------------------- -------------------------------
Date: Date:
------------------------------ ------------------------------
6
e-NITED
business solutions(R)
e-NITED Terms of Sale
Exhibit A
Credit Applications - In order to establish an account, all qualified resellers
must submit a credit application. e-NITED reserves the right to extend or
withhold lines of open credit to any reseller as determined by the reseller's
experience, record of payment, financial condition, amount of credit needed,
etc. Resellers requesting open credit lines must submit current financial
statements. e-NITED may also require personal guarantees and/or other security
interests to establish and maintain open account terms. Inquiries about credit
requirements should be addressed to Credit Department, e-NITED Business
Solutions, 000 Xxxxx Xxxxx, Xxxxx Xxxxxx, XX 00000
Payment Terms - e-NITED payment terms are "cash in bank [***] prox.". Payment of
the statement balance must be received in our bank by the [***] of the month
subsequent to billing. "Cash in bank" is defined a payment received in e-NITED's
lock box on the date specified. For shipments made during the month, e-NITED
will supply electronic invoices which express net prices for products purchased.
Both parties will their best efforts to resolve any payment disputes in a timely
manner.
Past Due Accounts - Open account privileges may be suspended if invoices are not
paid within e-NITED's published terms, and subsequent orders may be held until
the account balance is reduced to a current status. Unusual cases of adjustment
or dispute will be given individual consideration and handled accordingly.
1. Interest will be charged on past due amounts up to the maximum legal rate.
2. Statement balances must be paid in full, with no deductions.
3. Both parties will use best efforts to resolve any payment disputes in a
timely manner.
Payment Method - e-NITED will provide customers with an electronic statement
each month, on the lst or 2nd workday of the new month. Payment of the
statement balance may by bank checks, on a temporary basis, until electronic
funds transfer using the "e-NITED Payment Service" or a wire transfer method
acceptable to e-NITED's bank is available. Your e-NITED Business Development
manager can assist you in arranging your payment method.
Invoicing Method - Unless separate arrangements are made, all customers are
required to accept and process EDI invoices from e-NITED. e-NITED will send
ANSI X12 Invoice
7
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
documents by one of 2 methods: 1). They will be sent nightly using e-NITED's
proprietary EDI Mailbox System. The reseller can pick them up free of charge.
2). If the reseller uses a traditional Value Added Network (VAN), e-NITED will
send the invoices nightly via this method. The reseller is responsible for VAN
pickup charges when using this method.
Placing Orders - Electronic communications between e-NITED and its resellers are
essential to ensure an efficient and accurate transaction. As such, e-NITED is
able to communicate using the most traditional methods such as X12 EDI. In
addition, e-NITED is capable of receiving real-time orders via secure Internet
transactions. Resellers unable to communicate via a mutually acceptable
electronic means will be required to make special arrangements and will be
subject to a separate order processing fee of [***] per order. The special
order processing fee will go into effect [***] after Reseller's launch date.
Supplier will give 10 days notice to Reseller prior to making orders subject to
processing fee.
Order Processing & Minimum Orders Size - Orders from resellers will be accepted
at any dollar amount; however [***]. The Order Processing and Minimum Order
Size requirement will go into effect [***]. Supplier will give 10 days notice
to Reseller prior to making orders subject to handling fee.
Pricing -
1. An electronic price file will be published for our customers on a quarterly
basis, and the prices remain generally unchanged until the next pricer.
However, when necessary, we reserve the right to change pricing on an
interim basis reflecting sudden and/or severe manufacturer price increases.
Paper based products, computer peripherals and electronic items are
examples of products where price adjustments have been made within a
quarter. In addition to quarterly updates, resellers are encouraged to
download price updates (free of charge) weekly from United Stationers' web
site.
2. Net prices are F.O.B. the Regional Distribution Center from which the
shipment originates.
3. We will consider quoting prices for large quantities that can be drop-
shipped directly from manufacturer. Our customer service department will
be able to assist you in this regard.
Not-Listed (N.L.) Special Order Merchandise - We will be happy to obtain
merchandise not-listed in our Reseller Price File or stocked in any of our
Regional Distribution Centers. Orders for N.L. merchandise are processed
manually through e-NITED's Special Order Services Department at [***]. Special
Orders have a [***] per manufacturer order. (This requirement does not apply to
orders for replacement parts.)
All pricing (except for imprinted items) is quoted as a delivered cost. No
additional freight charges will be billed (within the Continental U.S.)
However, additional freight charges may be incurred if special shipping
arrangements such as overnight delivery are requested. Standard orders will be
shipped within 2 to 4 weeks, depending on the manufacturer.
8
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
Transportation Methods - e-NITED provides a unique service that automatically
routes your orders to the Regional Distribution Center closest to your customer
for fulfillment and delivery. In doing so, e-NITED uses the services of many
different carriers such as UPS, Fed-X and other common carriers. Every effort
will be made to ship your orders via the most expedient, economical and
practical means possible, consistent with e-NITED's carrier selection criteria.
e-NITED will advise you should non-traditional carriers or transportation
services be required to service your customer.
Freight, Programs & Charges - e-NITED makes available certain freight programs,
designed to help control and manage the cost of serving your customer while
providing superior levels of quality service. Our most effective freight
program is Nationwide Express Delivery, or XXX. By leveraging this service,
orders placed by [***] (local time) will be shipped that same day to arrive at
your customer generally within one or two business days. XXX service is
available within the contiguous 48 states (other services are available to
service your customers in outlying geographies). Service is available under one
of the following:
1. Option A. Shipments will be prepaid and freight charges will be added to
--------
the invoice. Freight will be charged back to the reseller for XXX
shipments based on the published freight rate schedule of the carrier used.
2. Option B. Shipments will be prepaid and freight charges will be added to
--------
the invoice. Freight will be charged back to the reseller for XXX
shipments at a flat rate of [***].
[***]
Claims & Adjustments -
1. All shipments under this Agreement shall be F.O.B Supplier's shipping
facility. Title and risk of loss shall pass to Reseller upon Supplier's
delivery of the Product to the common carrier at the point of shipment. In
the event of shipping damage or orders lost in shipment, Supplier will
assist in filing a claim.
2. All other claims for shortages or wrong-fills must be presented within 30
days from date of customer receipt. Any requests for proof of delivery
must be made within 60 days after invoice date. After 60 days, no proof of
delivery will be supplied.
3. It is the responsibility of the reseller to access available POD
information online from e-NITED.
Returns -
1. All merchandise is sold to resellers without return privileges. We will
not accept the return of any merchandise unless authorized by e-NITED.
a. Requests for returns must be made electronically, or by phone to your
local regional Customer Service department. These requests should be
made within 30
9
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
days from date of invoice. Merchandise returns will
not be accepted without a return authorization number properly affixed
to the returned goods shipping container. All authorized returns must
be received from the reseller within 30 days from the date of the
return authorization.
b. Return merchandise requests will be authorized at up to full invoice
price for up to 30 days from invoice date.
c. If for any reason the item, carton, or its packing is not in resoluble
condition, no credit will be issued.
2. We reserve the right to discontinue sales to any account that engages in
excessive returned merchandise transactions.
3. Special-Order merchandise, seasonal merchandise, discontinued merchandise
and special promotional items not normally stocked by us cannot be returned
except in case of our error or defect.
4. Defective merchandise which is under manufacturer's warranty must be
returned directly to the manufacturer or his authorized agent after the 30
day returns period has expired.
5. Returned freight charges, including call tag and pick-up surcharges, is the
responsibility of the shipper.
6. Any merchandise returned C.O.D. will be refused and returned to the
shipper.
7. All Authorization For Returns are voided 30 days after the authorization
was issued. Any merchandise received after 30 days will be returned to the
reseller.
Customer Service - At e-NITED, we pride ourselves in the in the quality of
service we render our reseller customers. One of the ways we are able to commit
to quality customer service is by leveraging technology and automating as many
of the typical customer service inquiry responses as possible. These inquiries
may include checking stock on an item, checking price on an item, requesting a
Return Authorization, etc. To that end, we encourage all of our reseller
customers to utilize our Automated Customer Service, but reserve the right to
charge [***] per call or inquiry made via voice or fax for a customer service
inquiry that could have been handled by the automated system. The [***] fee
will go into effect [***] after the Reseller's launch date. Supplier will give
10 days notice to Reseller prior to making inquiries subject to the charge.
If you have any questions regarding our policies please contact our Regional
Customer Service Department or your e-NITED Business Development Manager.
10
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
