Internet Resale Agreement

Logo of Ingram Micro]



INTERNET RESALE AGREEMENT

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This Agreement ("Agreement") is by and be tween PeoplePC Inc. ("PeoplePC"), with its principal place of business at 100 Pine Street, FL 11, San Francisco, California 94111, and Ingram Micro Inc. ("Ingram") excluding its subsidiaries, with its principal place of business at 1600 East St. Andrew Pl ace, Santa Ana, California 92705. This Agreement will include orders from PeoplePC's website for shipment within the United States, excluding its Territories.



1. PURPOSE



The purpose of this Agreement is to provide the terms and conditions for

the purchase and resale by PeoplePC and the sale by Ingram to PeoplePC of

products described in Ingram's current comprehensive product listing,

including any special Stock Keeping Units (SKUs) that have been established

for PeoplePC ("Product"), excluding electronic software distribution (ESD),

via PeoplePC's web page on the Internet, direct response television and

direct mail.



2. TERMS OF SALE



A. All Product sales will be subject to Ingram's standard Sales Terms and

Conditions (see Exhibit F), as may be amended from time to time without

notice at Ingram's sole discretion, published in its Comprehensive Catalog

("Catalog") at the time of purchase and are hereby incorporated by

reference. Ingram's current terms and conditions can be found on its

website www.ingrammicro.com. Should Ingram's Catalog provisions conflict

with this Agreement, the provisions of this Agreement will prevail.



B. If authorization for resale is required by the publisher or

manufacturer ("Vendor") of any Product, then Ingram will not be obligated

to sell such Product to PeoplePC unless Ingram has received such required

authorization. Ingram will make a reasonable effort to assist PeoplePC in

obtaining Vendor authorizations as required. If any Vendor prohibits Ingram

from selling a specific Product to PeoplePC, then Ingram reserves the right

not to sell said Product to PeoplePC.



3. VOLUME AND SERVICE LEVEL COMMITMENTS



Both parties agree to perform in accordance with their respective

obligations as specified in Exhibit A hereto. PeoplePC shall purchase from

Ingram the entire quantity of Systems identified in its Forecast (Exhibit E

hereto) and all additional Systems included in subsequent Forecast updates

but only to the extent that Ingram has actually ordered such originally

Forecast quantities and Ingram, after using commercially reasonable

efforts, is not able to cancel or defer such orders.



4. ORDERING



A. PeoplePC will compile, update and provide Ingram with Product order

information. The Product order information will include the: (i) Product

type(s), (ii) unit quantity, (iii) Ingram SKU number, (iv) PeoplePC current

price, (v) PeoplePC purchase order number and (vi) correct shipping



B. Ingram will receive orders electronically via Ingram's InsideLine

electronic ordering system only from those who have been identified as

authorized PeoplePC personnel and can



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Confidential



Confidential treatment has been requested with respect to the omitted port ions 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.

Ingram Micro Inc. Resale Agreement - --------------------------------------------------------------------------------



provide the Ingram customer number and a PeoplePC purchase order number.

Ingram will have no obligation to confirm the validity of any order placed

or the authority of the person placing an order in this manner and assumes

no liability for orders placed by unauthorized persons. PeoplePC will

disclose its Ingram customer number only to its personnel with a need to



C. In the event PeoplePC transmits an order with pricing higher than

Ingram's price to PeoplePC, Ingram will invoice PeoplePC at Ingram's lower

price. In the event PeoplePC transmits an order with pricing lower than

Ingram's price to PeoplePC, Ingram will notify PeoplePC to make the

appropriate change and Ingram will invoice PeoplePC at Ingram's price.



D. Backordered items will be shipped automatically if the backorder is

released within thirty (30) days of the original order date. Ingram will

cancel all backorders greater than thirty (30) days unless otherwise

notified by PeoplePC.



5. DATA SYNCHRONIZATION



Ingram will make Product information available electronically to PeoplePC

via InsideLine. PeoplePC is responsible for accessing, downloading and

updating Product information and performing regularly scheduled refreshes

to ensure the accuracy of PeoplePC's pricing information.



6. PRICING



A. System Pricing. Exhibit B includes pricing for specific personal

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computer systems including a Central Processing Unit (CPU), installed

software, monitor, keyboard, and mouse ("System"). Ingram will provide

PeoplePC with ninety (90) days prior written notice of any System pricing

increases. Ingram and PeoplePC agree to review System pricing quarterly.



B. For all Product not specifically identified in Exhibit B, pricing will

be established as of the date of order.



7. SHIPPING



A. All orders will be shipped FOB origin, via one of the UPS or Federal

Express options listed below as indicated on PeoplePC's purchase order to

Ingram. Each System shipped via UPS will be shipped standard ground freight

with adult signature required for receipt. For each System shipped Ingram

will charge and PeoplePC agrees to pay Ingram the shipping charges

identified below.



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Carrier Delivery Service Charges

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(Per System)

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UPS Standard ground [*]

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UPS Blue 2/nd/ Day [*]

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Federal Express 2/nd/ Day [*]

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Federal Express Standard Overnight [*]

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Federal Express Priority Overnight [*]

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UPS Red Overnight [*]

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Ingram and PeoplePC agree to review the above shipping charges a minimum of

ninety (90) days after the effective date of this Agreement. In the event a

shipment is lost, stolen, or damaged prior to receipt by the addressee,

Ingram will administer the claim with the carrier and will credit

PeoplePC's account for the purchase price of the Product and associated

shipping charges.



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Confidential



*****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.

Ingram Micro Inc. Resale Agreement - --------------------------------------------------------------------------------



PeoplePC agrees to pay for any freight carrier charges for C.O.D. or any

other special handling fees.



B. Packaging: All Products shipped directly to PeoplePC customers shall

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be packaged with minimal reference to Ingram. Specifically, the packaging

shall not display any Ingram trademark, service mark, logo, or trade name.

PeoplePC shall provide all necessary bezels and labels as required to

perform any desired customization of the Systems and boxes. If the carrier

requires a return address, Ingram may use its warehouse address, without

its company name, on such shipment. PeoplePC may utilize Ingram's limited

customization of standard packing slips upon written request.



C. Ingram will make its best efforts to ship Products within five (5)

business days of PeoplePC's order. All orders properly transmitted and

received after 2 p.m. Eastern Time, Monday through Friday will be

considered received on the day following the date the order was transmitted

to Ingram. Ingram shall not be liable for any failure or any delay in the

delivery of any Products due to a cause or causes not reasonably within the

control of Ingram including, without limitation, any delay caused by acts

of God, acts of PeoplePC, acts of civil or military authorities, fires,

strikes, floods, epidemics, governmental rules or regulations, wars, police

actions, or embargoes. Ingram shall not be liable for any losses or

damages, direct, indirect, special, consequential, incidental or otherwise

(including but not limited to advertising expenditures by PeoplePC), that

may arise out of Ingram's failure to meet delivery schedules.



D. Ingram shall provide PeoplePC with access to the date of shipment and

tracking information for each shipment within one (1) day after such

shipment of Products. Ingram shall instruct the chosen carrier that they

shall only release Product to a physical person and only at the correct

shipping address.



E. All shipments shall be made from one or more distribution centers in

the following states: California, Illinois, Pennsylvania, and such other

states as the parties may mutually agree upon from time to time.



8. PAYMENT TERMS



A. Ingram will invoice PeoplePC or a financial institution designated by

PeoplePC and approved by Ingram upon Product shipment and all invoices will

be due and payable net five (5) days from invoice date. Notwithstanding the

designated recipient of the invoices hereunder, PeoplePC will be completely

and solely liable to Ingram for the proper payment of all invoices

hereunder. Ingram will invoice PeoplePC via an Ingram approved electronic

method. The extension of credit and net terms are subject to Ingram's

approval and is contingent upon PeoplePC keeping its account current with

Ingram. PeoplePC agrees to provide adequate financial information as

required by Ingram's Credit Department. PeoplePC agrees that its payment to

Ingram is not dependent upon PeoplePC's receipt of payment from its



B. All shipment discrepancies resulting in a request for credit from

PeoplePC must have documentation (see Exhibit C) and be communicated to

Ingram's Credit Department within thirty (30) days of the date of invoice.

PeoplePC will immediately request a return material authorization ("RMA")

number for mis-shipped, overgoods, and canceled (shipped after written

cancellation date) orders. Upon authorization, PeoplePC agrees to return

Products to Ingram's designated warehouse, freight prepaid by PeoplePC, FOB

destination. In the event the Product return is the result of an Ingram

error, Ingram will arrange and pay for the return freight.



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9. RETURNS



A. PeoplePC must obtain a valid Return Material Authorization ("RMA")

number from Ingram for all returns. As used herein, "Resalable Condition"

shall mean Product that is without price tags, clean, undamaged, unused,

unopened and complete in the manufacturer's original packaging. All

Products returned must be in Resalable Condition. If Ingram receives a

return without an RMA number it will be considered a refusal ("Refusal").

For Refusals, Ingram will receive the Product, scan it into the database,

and verify the condition of the Product by visible inspection. PeoplePC

will be charged the following re-stocking fees for all Refusals.



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PRODUCT RE-STOCKING FEE

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Systems [*] each

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All other Product [*]

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B. Systems Returns. For all Systems purchases Ingram will accept returns

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of non-defective Systems that are in Resalable Condition subject to a

monthly returns rate maximum of [*] of the total value of all purchases

during the previous Ingram fiscal month. PeoplePC will be assessed a re-

stocking fee of [*] for each System returned.



C. Non-Systems Product Returns. Ingram may grant PeoplePC a RMA for

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Products purchased from Ingram, excluding Systems, within one hundred fifty

(150) days of invoice date for credit against future purchases by PeoplePC;

provided that the total purchase price of all such returns shall not exceed

fifteen percent (15%) of all purchases during the ninety (90) days

preceding the request to return the Products. Notwithstanding anything to

the contrary, Ingram reserves the right not to authorize the return of

Products which are: (i) no longer in production; (ii) being produced or

published by a manufacturer or publisher which is insolvent, has declared

bankruptcy, or will not accept returns from Ingram, or (iii) subject to

more restrictive stock balancing policies issued by the Product's

manufacturer or publisher. Ingram will make its best efforts to inform

PeoplePC of any manufacturer or publisher changes to their returns policies

via InsideLine. PeoplePC shall pay all costs and bear all risks of loss

when returning Non-Systems Products to Ingram. Non-Systems Configured

Products may not be returned.



D. All Refusals received by Ingram that are not in Resalable Condition as

determined by Ingram's visual inspection, at Ingram's reasonable sole

discretion, will be re-shipped at PeoplePC's expense to either: (i) an

address provided by PeoplePC within forty-eight (48) hours of Ingram's

receipt of the Refusal; or (ii) PeoplePC's designated liquidator. In the

event that PeoplePC has not provided Ingram with a valid ship to address

for any Refusal as identified above, then PeoplePC agrees to relinquish all

rights and title to Refusals that are not in Resalable Condition and grants

permission to Ingram to liquidate Refusals without issuing credit to

PeoplePC's account. PeoplePC also agrees to reverse debits for Refusals

within ten (10) days of notification of the Refusal.



E. Defective/DOA Products: Subject to the manufacturer's or publisher's

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warranty requirements and restrictions, Ingram may grant PeoplePC a RMA for

defective Products purchased from Ingram for replacement or credit against

future purchases by PeoplePC. All defective Products except for Configured

Products, mass storage and branded memory Products for which Ingram has

granted an RMA must be returned to Ingram within ninety (90) days of

invoice date. Defective Configured Products, mass storage and branded

memory Products must be returned to Ingram within thirty (30) days of

invoice date. Ingram may return to PeoplePC, at PeoplePC's expense, any

Products found not to be defective. Ingram reserves the right to require

PeoplePC to return defective Products directly to the Products'

manufacturer or publisher for



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Confidential



*****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.

Ingram Micro Inc. Resale Agreement - --------------------------------------------------------------------------------



replacement according to the manufacturer's or publisher's defective

Products return policy. Ingram will pay ground-freight expenses for

defective or DOA Products that are returned to Ingram. Ingram shall not be

obligated to repair or replace Products rendered defective, in whole or in

part, by causes external to the Products, including, but not limited to,

catastrophe, power failure or transients, overvoltage on interface,

environment extremes, improper use, maintenance and application of the

Products or use of unauthorized parts.



F. In an effort to eliminate future reconciliation issues when a credit

is granted, Ingram agrees to credit PeoplePC within thirty (30) days of

claim approval and PeoplePC agrees to hold any deduction for thirty (30)

days from the ship date of any return.



G. Damaged box or re-box service fees of thirty-five dollars ($35) per

item and additional costs for packaging goods as applicable may also apply.



H. Ingram reserves the right to change its return policies at any time

without notice to PeoplePC. Ingram will provide PeoplePC thirty (30) days

prior written notification of any changes to its return policies applicable

to the Systems listed in Exhibit B.



10. MARKETING



Ingram will make commercially reasonable efforts to obtain co-op or

marketing funds from Vendors for PeoplePC.



11. RECONCILIATION



A. Ingram and PeoplePC agree to reconcile any open accounts receivable

balance on PeoplePC's account every ninety (90) days. In order to allow

appropriate credits to be applied, Ingram requires that PeoplePC apply a

thirty (30) day delay from the ship date of a return to Ingram in debiting

Ingram. Claims must be submitted to Ingram in writing with the required

documentation as set forth in Exhibit C. Ingram will issue credit memos

within thirty (30) days of claim approval. The applicable documentation as

set forth in Exhibit C must accompany PeoplePC's check(s) containing the

deduction(s). Upon notification by Ingram, all denied claims require

immediate payment by PeoplePC.



B. PeoplePC will complete all audits within sixty (60) days of the close

of its fiscal year. PeoplePC agrees to submit internal post audit claims

to Ingram within thirty (30) days of completion of the audit. Ingram will

have sixty (60) days to respond in writing to these claims prior to

PeoplePC taking any deduction.



12. SALES TAX



PeoplePC will assume full responsibility for the collection of all sales

tax and reporting to the appropriate authorities. PeoplePC agrees to

defend, indemnify, and hold harmless Ingram from and against any and all

damages and costs incurred that may result from inadequate collection and

reporting of sales tax.



13. RESALE ONLY/EXPORT



All Products delivered to PeoplePC hereunder are for resale only and will

not be used for the internal business purposes of PeoplePC, or any parent

company, subsidiary or affiliate of PeoplePC. All Products delivered to

PeoplePC hereunder are intended for use in the United



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