UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
Exhibit 10.7
November 2, 1999
DG Jewellery
To: Daniel Berkovits
TERMS OF AGREEMENT
THE PARTNERSHIP
- UBid will market and sell DG Jewellery products, selected according to
the terms and conditions of this Agreement through its on-line auction
system (the "Accepted Products"). Subject to the terms and conditions
herein, UBid will use reasonable efforts to market the Accepted
Products appropriately and strategically, in its sole discretion, so as
to insure the highest possible return on all Accepted Products.
- - Subject to the terms and conditions herein, DG Jewellery agrees that, for the
duration of this Agreement, it will (a) provide jewellery products exclusively
to UBid, and to no other internet site or business that is engaged in online
auctioning, according to the terms of Exhibit A; and (b) offer UBid the RIGHT OF
FIRST REFUSAL to any new products that DG Jewellery designs or develops.
Notwithstanding the foregoing, (a) DG Jewellery shall be released from the
exclusivity obligation set forth herein in the event that UBid does not meet the
sales volumes set out in Exhibit A for a period of three (3) consecutive months;
and (b) UBid acknowledges that it has been made aware of DG Jewellery's
arrangement with Bid.com and with two undisclosed auction sites, one already
existing and one soon to commence; however, DG Jewellery has agreed to make uBid
its prime auction distributor and undertakes and agrees not to seek additional
arrangements or similar business (this includes Ebay, First Auction, Onsale, Web
Auction, and Egghead).
- - [DG Jewellery will be the exclusive supplier of FINE JEWELRY to UBid]
- - [DG Jewellery agrees to offer UBid the LOWEST PRICES for all DG
Jewellery products offered to UBid.]
- The parties agree to revenue sharing for all Accepted Products
sold through the UBid online auction system according to the
following formula: (a) for the first US$3 million in sales, the
division, in percentage terms, of sales revenue shall be 85% to
DG Jewellery and 15% to UBid; and (b) for all subsequent sales,
the division, in percentage terms, shall be 80% to DG Jewellery
and 20% to UBid.
- The initial term for this Agreement shall be five (5) years from
the Effective Date (the "Term").
UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
- Products to be Accepted and placed for online auction will be
decided upon jointly by DG Jewellery and UBid, in order to determine
the optimum assortment of products offered; provided however, that
UBid shall have the right to final determination as to the timing of
the offer, placing or positioning on the UBid site, marketing and
other related decisions with respect to the online auctioning of the
Accepted Products .
- - DG Jewellery will pay a non-refundable setup fee of US$150,000 (the "Setup
Fee") to UBid for the design, setup and creation of content relating to the
marketing and selling of Accepted Products on the UBid site (the
"Content"). Subject to the terms and conditions of the Vendor Agreement,
such Setup Fee shall be payable in five equal monthly installments of
US$30K/month, commencing May 1st, 1999. All right, title and interest to
the Content (including without limitation all intellectual property rights)
shall be owned by UBid.
- - DG Jewellery will provide UBid with any information, images and other
materials which UBid may reasonably require in order to design, setup and
create the Content and to market and sell the Accepted Products (the
"Promotional Materials").
- - Both companies shall mutually review and approve any press releases in
connection with this Agreement and the terms thereunder prior to such
release.
UBID EXPECTATIONS
- DG Jewellery agrees to ship all products within 7-10 days of receiving a
packing slip (faxed daily from UBid).
- DG Jewellery agrees to ship all products using a UBid designated carrier
(currently either Federal Express orUPS) using our supplied account
number as follows:
1. FedEx - 182129709
2. UPS - X4203W
- DG Jewellery agrees that all shipments without exceptions will originate
from the United States using the above Fed Ex or UPS#'s
- DG Jewellery agrees to be responsible for and handle all end user
warranties.
- DG Jewellery will email tracking numbers and shipping confirmations daily
to a designated UBID representative - currently Lakeisha at
ubidcs@tn.cc-inc.com and CC also Crystall at CRYSTALP@UBID.COM.
(Eventually all correspondences will be handle electronically).
- DG Jewellery will be responsible for and handle all customary customer
service matters, including without limitation all returns of product. If
UBid accepts a return on any DG Jewellery product, DG Jewellery will be
notified promptly within 7 days to enable it to carry out its obligations
with respect to such returned product.
UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
- - DG Jewellery will not include any materials other than those previously
approved by uBid in writing (including without limitation any third party
marketing materials) with shipments to UBid customers.
- - UBid will provide custom box tape for all shipments.
UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
VENDOR AGREEMENT
This agreement (this "Agreement") dated March 11, 1999 (the "Effective Date") is
between UBID, Inc., a Delaware Corporation ("Reseller") and ___________________
("Vendor"). It sets forth the terms and conditions for a business relationship
between the two parties.
1. PAYMENT TERMS: Items that Vendor and UBid agree to revenue share, according
to this Agreement and any attachments and exhibits annexed hereto, will be
paid every Tuesday for sales concluded in the previous week.
2. RETURNS OPTIONS: Vendor understands and agrees that from time to time, UBid
may accept merchandise returns which do not meet customer satisfaction or
requirements. Such returns will be considered defective returns. In
addition to any other terms and conditions in this Agreement governing
product returns, Vendor agrees to accept all such returned merchandise for
full credit. Vendor will pay the cost of freight on all defective returns.
3. CUSTOMER SERVICE: Vendor will provide a phone number for all end user
warranty, technical support, and missing parts issues for UBid customers,
as follows.
UBid Customer Service Contact: Name:
------------------------
Phone Number
------------------------
End User Contact: Phone Number
------------------------
Warehouse Contact: Name:
------------------------
Phone Number:
------------------------
Fax Number:
------------------------
4. VENDOR'S WARRANTIES: Vendor represents and warrants that (a) it has the
right to supply, use and deal with the products as contemplated by this
Agreement, and that it has the right to grant the same to UBid; and (b) it
has obtained, or will obtain prior to the marketing of any product, all
relevant consents, permissions, licenses and rights (including without
limitation any copyright permissions) to market, use or otherwise deal with
the products and Promotional Materials as contemplated by this Agreement.
5. LICENSE OF MARKS: Except as set forth herein, each party is granted no
rights in or to the other party's Marks. "Marks" means the trademarks,
service marks, tradenames or other marks, registered or otherwise, used by
either party, as applicable. Vendor hereby grants UBid a
UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
limited, worldwide, royalty-free, non-exclusive, non-transferable right
to use its Marks solely for the purpose of this Agreement.
6. GENERAL: Vendor will not place bids or cause bids to be placed on Accepted
Products (as such term is used in the attached Terms of Agreement) for the
purpose of influencing customer behaviour, including without limitation
raising or otherwise manipulating the bidding, regarding any Accepted
Product. Vendor shall not issue any press release relating to this
Agreement without the prior written consent of UBid.
7. CONFIDENTIALITY: From time to time, each party may provide the other with
Confidential Information. Both parties hereby agree to protect such
Confidential Information of the other party with at least the same degree
of care (but no less than a reasonable degree of care) as it protects its
own Confidential Information, and shall not disclose any Confidential
Information to any third party without the prior written consent of the
other party, except to its employees who have a strict and justified
business "need to know" and who are subject to confidentiality obligations
with respect to such information that are no less strict than those imposed
by this Agreement. The confidentiality obligations set forth herein shall
not apply to Confidential Information that was or becomes generally known
to the public through no fault of the receiving party, or that is obtained
by the receiving party from a third party without restriction, or that is
independently developed by the receiving party, or that is required to be
disclosed by a court or other competent legal authority. "Confidential
Information" as used herein shall mean any and all information that is
disclosed by one party that is either identified or should be reasonably
understood to be confidential and proprietary, including without limitation
any trade secrets, computer programs, software, marketing plans, customer
lists, financial or other business information.
8. INDEMNITY: Vendor shall defend, indemnify, and hold harmless UBid from any
and all lawsuits, claims, actions, and liabilities, of any nature, arising
in any manner from, relative to or in conjunction with UBid's acts or
failure to act, any of the Accepted Products and/or Promotional Materials
(as such term is used in the Terms of Agreement), or Vendor's breach of any
of its representations, warranties and obligations (including without
limitation any claims that any materials or products provided by Vendor
infringes the intellectual property rights of any third party) under this
Agreement.
9. TERMINATION: UBid shall have the right to terminate this Agreement in the
event that Vendor materially breaches any term of this Agreement, and such
breach remains uncured for thirty
UBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000
(30) days following Vendor's receipt of notice of such breach from UBid.
UBid's exercise of such right to terminate shall not affect (a) the rights
and liabilities of either party with respect to Products sold prior to
termination; (b) any indebtedness then owing by either party to the other
(including, without limitation, any and all instalments of the Setup Fee
unpaid as of the date of termination, which shall, notwithstanding any
provision to the contrary in this Agreement , the Terms of Agreement or any
Exhibit thereto, immediately become due as of such date of termination);
(c) obligations imposed by the provisions of this Agreement which by their
nature survive termination; or (d) any liability for damages resulting from
an actionable breach.
10. MISCELLANEOUS: This Agreement, the Terms of Agreement and Exhibit A (both
of which are annexed hereto) constitutes the entire understanding and
agreement between the parties and supersedes any prior verbal or written
representations, communicatoins and understandings between the parties
concerning the subject matter herein. Any and all modifications, changes
and/or additions to the above shall be ineffective unless agreed to in
writing by both parties. This Agreement is entered into in the State of
Illinois and shall be governed by and construed in accordance with the laws
of the State of Illinois, exclusive of its choice of law rules or the
United Nations Convention on Contracts for the International Sale of Goods.
Each party to this Agreement hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts of the State of Illinois, and
waives any jurisdictional, venue or inconvenient forum objections to such
courts. The relationship between both parties created by this Agreement is
that of independent contractors, and nothing in this Agreement is intended
to construed the existence of a partnership, joint venture or agency
relationship between the parties. Vendor may not assign or transfer this
Agreement without UBid's prior written consent.
Daniel Berkovits CEO Tim Takesu V.P.
- ------------------------------------- -------------------------------------
Vendor Representative Name Title UBid Representative Name Title
/s/ Daniel Berkovits 3/11/99 /s/ Tim Takesu 3/11/99
- ------------------------------------------ --------------------------------------
Vendor Representative Signature Date UBid Representative Signature Date
uBid Online Auction
2525 Busse Road
Elk Grove Village, IL 60007
847-860-5000