<PAGE>

                                                                EXHIBIT 10.4

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.

                          ORDER FULFILLMENT AGREEMENT

This Order Fulfillment Agreement ("Agreement") is entered into effective as of
the 1st day of February 1999, by and between Buy.com, Inc. ("Retailer") and
i.FILL, a division of Valley Media, Inc. ("Valley").

                                  BACKGROUND

A.  Valley is a distributor of pre-recorded music products ("Product")

B.  Valley has created databases known as "audiofile" and audiotrax" containing
    information regarding Product.

C.  i.FILL provides to various retailers "direct-to-consumer" order fulfillment
    services, pursuant to which i.FILL picks, packs and ships Product to the
    retailer's customers.

D.  Retailer intends to operate on the World Wide Web an "on-line retail store"
    (the "Site") through which it intends to sell Product.

                                   AGREEMENT

Subject to the terms and conditions set forth below, the parties agree as
follows:

1.  BASIC AGREEMENT. Retailer and i.FILL agree to develop a computer and
    customer service interface for the purposes of conducting small order
    Product transactions via an on-line music store and other direct response
    marketing efforts. Retailer will build and maintain a web site. Retailer
    will also conduct all marketing and merchandising efforts, collect all
    orders and send such orders to i.FILL via EDI. i.FILL will be responsible
    for picking, packing and shipping the orders directly to Retailer's
    customers.

2.  EXCLUSIVITY. i.FILL will be the exclusive supplier of Product and related
    Product order fulfillment services for Retailer.

3.  TECHNICAL ASSISTANCE. i.FILL shall provide technical assistance to Retailer
    for the testing of their EDI transmission of orders to Valley's Bulletin
    Board System or FTP server.

4.  AUDIOFILE DATABASE. i.FILL will license the audiofile License Agreement
    attached hereto as Exhibit A for an annual license fee of [***]. The fee for
                                                               ---
    the first year of the initial term of this Agreement is due and payable on
    the date of this Agreement. The fees for the subsequent years of the initial
    term of this Agreement are due and payable upon the anniversary dates of
    this Agreement.

5.  AUDIOTRAX DATABASE. i.FILL will license the audiotrax database to Retailer
    under terms and conditions set forth in the audiotrax License Agreement
    attached hereto as Exhibit B for an annual license fee of [***]. The fee for
                                                               ---
    the first year

______________________

     [***] 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.
<PAGE>

    of the initial term of this Agreement is due and payable on the date of this
    Agreement. The fees for the subsequent years of the initial term of this
    Agreement are due and payable upon the anniversary dates of this Agreement.

6.  INCREMENTAL MARKETING DOLLARS. i.FILL will provide Incremental Marketing
    Dollars (IMD) to Retailer which includes co-op advertising funds and market
    development funds. Retailer agrees to utilize Valley as its exclusive agency
    for procurement of such funds relating to Product. i.FILL will credit
    Retailer IMD funds procured less [***]. Should Retailer meet its minimum
    annual net Product sales goal ("Volume Goal") for any given year as
    described in Section 7 herein and has adhered to and obeyed all [***],
    i.FILL will guarantee the procurement of IMD funds to be [***] of Retailer's
    annual net Product sales for that year. If, in any year as defined in
    Section 7, Retailer has met its Volume Goal and adhered to [***], but i.FILL
    has not yet procured [***] of Retailer's annual net Product sales in IMD
    funds, i.FILL will credit Retailer with the difference between [***]
    received and [***] of Retailer's annual net Product sales. If, in any given
    year, Retailer does not meet its Volume Goal or does not adhere to all
    [***], i.FILL will guarantee only the IMD funds that have been procured to
    date for that year. IMD Funds shall be paid on a quarterly basis.

7.  PRODUCT PRICING. Except as otherwise set forth in this Agreement, for the
    term of this Agreement, i.FILL will sell Product to Retailer [***], as
                                                                  ---
    described in [***] attached hereto as Exhibit C, provided, however, that
                  ---
    Retailer meets the minimum annual Volume Goals during the term of the
    agreement as set forth below:

        Time Period                    Annual Net Product Sales Volume Goal
        -----------                    ------------------------------------
          [***]                        [***]
           ---                          ---
          [***]                        [***]
           ---                          ---

    If at the end of any given year defined above, Retailer has not met the
    minimum Volume Goal, Retailer will be debited the equivalent of [***]
                                                                     ---
    percent ([***]) of its gross Product sales of that year.
              ---

    7.1   Average Cost. For purposes of this Agreement, "Average Cost" means the
          ------------
          average price paid by Valley for each Product by Stock Keeping Unit
          ("SKU"). Average Cost is calculated as follows: as Product is
          purchased by Valley, the costing system recalculates, at the time of
          receipt processing, the average price for each SKU in Valley's
          inventory. This costing system incorporates full case pack purchases
          (i.e., "Box Lots") as well as purchases in less than Box Lot
          quantities (i.e., "Loose Piece" purchases), each by SKU. The Average
          Cost calculation includes Box Lot incentives, new release discounts,
          ongoing and periodic catalog discounts, and one-time discounts. The
          Average Cost calculation does not include cash discounts for timely
          payment by Valley,

______________________

     *Confidential treatment is requested for confidential information enclosed
in brackets and underlined.

     [***] 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.

                                       2
<PAGE>

          return incentives, advertising incentives or volume rebates. In
          addition, specially negotiated prices on purchases from secondary,
          nontraditional sources (e.g., inventory purchased in connection with
          corporate acquisitions, outsourcing contract, and liquidation), shall
          not be included in the Average Cost calculation.

     7.2  [***]. The Cost Plus Pricing for CD singles and cassette singles, (as
           ---
          described in the audiofile documentation provided to Retailer from
          time to time and referred to in section 16.3 below) will be [***].  A
                                                                       ---
          copy of the current audiofile user documentation is attached hereto as
          Exhibit D.

     7.3  [***]. Retailer acknowledges that the price charged by i.FILL to its
           ---
          customers for Product sold to such customers ("Product Pricing")
          reflects the cost of Product to i.FILL, as well as the customer's
          order volume, payment terms, fulfillment costs, exclusivity
          requirements, the term of agreement with the customer, product mix
          purchased by the customer, and the service standards offered to the
          customer.

          7.3.1  The Product Pricing offered to Retailer by i.FILL shall be
                 [***], meaning that the Product Pricing offered to Retailer
                  ---
                 shall be [***] to [***] when taking into account all the
                           ---      ---
                 factors set forth above, provided that [***]. The term [***]
                                                         ---             ---
                 refers to i.FILL's direct-to-consumer customers who receive
                 Cost Plus Pricing.

          7.3.2  In the event that i.FILL or Valley offers [***] to any other
                                                            ---
                 similarly situated direct-to-consumer customer, Retailer shall
                 immediately be entitled to [***] provided that Retailer also
                                             ---
                 agrees to accept any other terms and conditions imposed upon
                 [***] including, without limitation, sales volume requirements,
                  ---
                 payment terms, fulfillment fees, term of the agreement, product
                 categories purchased, and level of service offered [***].
                                                                     ---

8.  CUSTOM INVOICE. i.FILL will create a custom invoice with Retailer's logo,
    product return and customer service information printed on same. The usual
    [***] one-time charge will be waived by i.FILL.
     ---

9.  ORDER PLACEMENT. Retailer will collect orders and send such orders to i.FILL
    via EDI.

    9.1  Pre-orders. Retailer shall collect pre-orders until four days prior to
         ----------
         the date that a new release title is first to be made available to
         consumers (the "street date"), at which point such pre-orders will be
         forwarded in a separate batch to i.FILL on the date and time of day
         required by i.FILL. i.FILL shall ship all pre-orders no later than
         street date minus one day, provided i.FILL has received the new release
         title(s) from the label/distributor of such new release(s) in time for

______________________

     [***] 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.

                                       3
<PAGE>

          processing.  If a street date is delayed, Retailer will be responsible
          for holding the pre-orders until four (4) days before the new street
          date.

     9.2  Back Orders. i.FILL shall ship the in-stock items of an order as set
          -----------
          forth in this Agreement and, except as set forth in this section, will
          cancel the out of stock items. Retailer may elect to have i.FILL hold
          an order that has one or more items out of stock until it is
          completely fulfilled by typing a "Y" in the "ship complete" field of
          the EDI inbound specifications. Retailer will inform i.FILL of the
          number of days, up to a maximum of 25 days (the "hold Period"), that
          i.FILL is to hold the "ship complete" orders before shipping the
          available products and canceling the out of stock products. In the
          event that all products included in an order are out of stock, i.FILL
          will hold the order for the Hold Period before canceling the order
          (subject to prior cancellation of such order by Retailer).

10.  ORDER FULFILLMENT. The following sets forth i.FILL's fulfillment practices:

     10.1 Priority. Priority orders are defined as orders shipped domestically
          --------
          for overnight or second-day air freight delivery. Priority orders
          received on any business day by 10:00 a.m. Pacific Time ("PT") will be
          shipped on the same day. Orders received after 10:00 a.m. PT will be
          shipped the following business day.

     10.2 Standard. Standard orders are defined as all orders shipped
          --------
          domestically or internationally for other than overnight or second-day
          air freight delivery. On any business day that i.FILL receives
          Standard orders by 1:00 p.m. PT, it will ship the orders the following
          business day. Standard orders received after 1:00 p.m. PT will be
          deemed received the next business day and i.FILL will ship these
          orders the business day after the day they are deemed to be received.

     10.3 Peak Periods. The first day of a business week and any day on which
          ------------
          order volume is greater than [***] above average (calculated on a
                                        ---
          floating 30-day basis) is defined as a Peak Period. i.FILL shall use
          best efforts to adhere to the fulfillment policies set forth above
          during Peak Periods, but its failure to so adhere during Peak Periods
          shall not be considered a default under this Agreement.

11.  FULFILLMENT FEES. Unless otherwise provided in this Agreement, Retailer
     agrees to pay i.FILL the following fees for each order fulfilled by i.
     FILL.

     11.1 Packing and Handling Fees i.FILL will pick, pack and prepare Product
          -------------------------
          for shipment to Retailer's customers for a fee of [***] per first unit
                                                             ---
          in a given order and [***] per subsequent unit in that same order.
                                ---

______________________

     [***] 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.

                                       4
<PAGE>

     11.2 Surcharges Retailer agrees to pay to i.FILL the following surcharges
          ----------
          as applicable:

          11.2.1 International Shipment Surcharge. Surcharge of [***] per order
                 --------------------------------                ---
                 shipped internationally via integrated carrier.

          11.2.2 USPS Priority Mail Insured Surcharge. Surcharge of [***] per
                 ------------------------------------                ---
                order shipped USPS Priority Mail Insured.

          11.2.3 Manual Processing Surcharge. In the event i.FILL receives an
                 ---------------------------
                 order by any other means EDI transmission (i.e., by mail,
                 facsimile, etc.) a surcharge of [***] per order shall be
                                                  ---
                 assessed.

12.  SHIPPING

     12.1 Risk of Loss. All shipments under this Agreement shall be F.O.B.
          ------------
          Valley's shipping facility. Title and risk of loss wit respect to all
          orders and products shipped by i.FILL or Valley under this Agreement
          shall pass to Retailer or its customers upon delivery of the products
          to the carrier at the point of shipment. In the event of shipping
          damage or orders lost in shipment, i.FILL will assist in filing a
          claim on behalf of Retailer and will credit Retailer any amounts
          received or credits to i.FILL in connection with each claim.

     12.2 Choice of Carrier i.FILL will ship the order with the carrier
          -----------------
          requested by Retailer or its customer. i.FILL will cancel any order
          with the carrier requested by Retailer or its customer. i.FILL will
          cancel any order for which the delivery address is not serviced by the
          indicated carrier, and will promptly notify Retailer of the same.
          Retailer shall have the option to retransmit the order to be shipped
          via an alternate i.FILL supported carrier.

     12.3 Shipping Costs. i.FILL will invoice Retailer's customers at such rates
          --------------
          as are requested by Retailer. Retailer will pay i.FILL shipping costs
          per the shipping tables attached hereto as Exhibit E (as mentioned
          from time to time by i.FILL). i.FILL will provide Retailer written
          notice of shipping rate changes and the effective date of such
          changes. i.FILL represents that the shipping costs charged to Retailer
          are its actual shipping costs (not considering rebates).

13.  PRODUCT RETURNS

     13.1 Definitions.
          -----------

          13.1.1 Rejected Returns: Any of the following: accessories; blank
                 ----------------
                 tape; counterfeit Product; imports; promos; limited editions;
                 Product identified in audofile as non-returnable; Product sold
                 by a record club; Product sold

______________________

     [***] 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.

                                       5
<PAGE>

                 on an one-way basis; Product with a last customer return date
                 (as defined in the audiofile license agreement) prior to the
                 date the returned product is received by i.FILL; Product
                 without the original artwork or liner notes; Schwann Guides;
                 shopworn Product (items that have damage to the artwork, have
                 foreign substance on the media or have been defaced); and vinyl
                 Product.

          13.1.2 Breached Product. Any Opened CDs from the following companies:
                 ----------------
                 Intersound; Polygram Distribution ("PGD"); RYKO; Sony Music
                 Entertainment ("Sony"); Universal ("UNI"); and Warner, Electra
                 and Atlantic ("WEA"). Any Opened PGD cassettes are considered
                 Breached.

          13.1.3 Opened Product: Any Product with the top spine label or
                 --------------
                 original manufacturer's shrink wrap or "dog bone" holographic
                 sticker removed or cut in any way.

          13.1.4 Defective Product: Any Opened Product that is identified as
                 -----------------
                 defective when returned and which is actually defective.

          13.1.5 Accepted Returns. Any Product which is neither Rejected Return
                 ----------------
                 nor Breached Product.

     13.2 Return Policy. Accepted Returns are returnable and eligible for return
          -------------
          credit to Retailer. Rejected Returns and Breached Product are non-
          returnable and not eligible for return credit to Retailer.

     13.3 Return Fees. In the event i.FILL receives Rejected Returns or Breached
          -----------
          Product from Retailer or its customers, the Product will be returned
          to Retailer at [***] per unit processing charge will be imposed.
                          ---
          Retailer may elect to have i.FILL keep the Product to avoid the [***]
                                                                           ---
          per unit processing charge.

     13.4 Refurbishing Fees. Retailer will pay a [***] per unit refurbishing fee
          -----------------                       ---
          on all Accepted Opened Product except for Defective Product.

     13.5 Restocking Fees. Retailer will pay a [***] Restocking Fee for
          ---------------                       ---
          processing all Accepted Returns except for Defective Product and
          Unopened Product returned as incorrect items.

     13.6 Reshipping. i.FILL will accept and reship orders returned by
          ----------
          Retailer's customers at no Restocking or additional Fulfillment Charge
          if the returned Product falls into any of the following categories:
          (1) Unopened items returned as incorrect items shipped (items included
          in the package that were not listed on the

______________________

     [***] 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.

                                       6
<PAGE>

      invoice); (2) items listed on the invoice as fulfilled, but reported as
      missing by the consumer; and (3) correct items returned as Defective, but
      not Breached.

13.7  Return Processing Information. Return processing information will be
      -----------------------------
      posted daily to i.FILL's Bulletin Board System or FTP server.

13.8  Modifications. i.FILL reserves the right to modify its return policies
      -------------
      from time to time. Such modifications shall be effective upon Receipt by
      Retailer of written notice thereof.

14.   OPTIONAL SERVICES

      14.1  Paper Inserts  Retailer will pay a fee of [***] per Paper Insert
            -------------                              ---
            packed by i.FILL at the request of Retailer in product shipped under
            this Agreement. Retailer shall supply the Paper Inserts at no cost
            to i.FILL. For purposes of this paragraph, Paper Inserts are defined
            as lightweight, paper-based, promotional items the same size or
            smaller than a standard single CD, or pre-folded to such size.

      14.2  Merchandise Inserts. At Retailer's request, i.FILL will pack
            -------------------
            Merchandise Inserts (promotional inserts other than the Paper
            Inserts described in paragraph 14.1) in its orders at a cost to be
            negotiated by the parties. Retailer shall supply Merchandise Inserts
            at no cost to i.FILL.

      14.3  Exclusive Merchandise. Upon request by Retailer, i.FILL will
            ---------------------
            receive, warehouse and ship Exclusive Merchandise sold through
            Retailer for a fee to be negotiated after a sample has been received
            and reviewed for packing and shipping requirements. For merchandise
            that is standard product (single CDs or cassettes and single VHS) a
            management fee of [***] per unit will be applied.
                               ---

      14.4  Insert Bar Codes. A unique UPC bar-code is required for each Paper
            ----------------
            or Merchandise Insert. Retailer should purchase and apply a
            proprietary bar-code on all inserts. At Retailers request or if the
            bar-code does not meet Valley's standards, i.FILL will create and
            apply a bar-code for a fee of [***] per applied bar-code.
                                           ---

      14.5  Custom Price Stickers. At Retailers request, i.FILL will apply
            ---------------------
            customer price stickers for a fee of [***] per applied sticker.
                                                  ---

15.   BILLING AND PAYMENT Pending i.FILL's review and approval of Retailers
      credit application, i.FILL will extend credit to Retailer under the
      following terms and conditions:

___________________________

      [***] 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.

                                                                     Buy.com____
                                                                      i.FILL____

                                       7
<PAGE>

     15.1 Invoices and Account Reconciliation. i.FILL will provide Retailer with
          -----------------------------------
          an account reconciliation on a monthly basis. Invoices are due and
          payable thirty (30) days after the invoice date.

     15.2 Past Due Amounts. [***]Furthermore, all overdue balances not paid
          ----------------   ---
          within [***] after the invoice date, will be assessed interest at the
                  ---
          lesser of [***] or the maximum interest rate allowable by law,
                     ---
          beginning on the due date. i.FILL, in its sole discretion, may refer
          collection of any past due amount to any agency or attorney, and
          Retailer will be liable for the payment of all costs and expenses,
          including reasonable attorney's fees, associated therewith.

16.  PROPRIETARY RIGHTS.

     16.1 Confidential Information. The term "Confidential Information" refers
          ------------------------
          to this Agreement and the subject matter of this Agreement and to all
          information which one party furnishes or makes available to the other
          party and all information related to one party's business which the
          other party and all information related to one party's business which
          the other party acquires in the course of performing its obligations
          under this Agreement. Disclosure of Confidential Information by a
          party is forbidden except in the following circumstances: (i) to
          employees and outside parties, but only to the extent necessary to
          fulfill its obligations under the Agreement; (ii) if the Information
          disclosed is already publicly known through no fault of the disclosing
          party; (iii) if the information is required to be disclosed by law or
          legal process, provided that the party, from whom disclosure is
          promptly required, gives the other party notice and agrees to
          cooperate with the non-disclosing party as that party may reasonably
          request to oppose disclosure; and (iv) in connection with a party's
          initial public offering; provided, however, that the disclosing party
          shall take reasonable measures to keep Confidential Information
          confidential, including requesting confidential treatment of this
          Agreement by any governmental authority and/or any other person or
          third party reviewing the Agreement in connection with the public
          offering. Under no circumstances may Retailer disclose Confidential
          Information including, but not limited to, any information obtained
          during Retailer's i.FILL site visit, to any of Retailer's outside
          directors; provided, however, that Retailer may disclose general
          financial information (i.e., sales of Product) to its outside
          directors to the extent required by law. i.FILL (including its
          principals or affiliates) agrees not to use Retailer's customers' data
          for any commercial or improper purposes.

     16.2 Transaction Information. Both parties shall use best efforts to ensure
          -----------------------
          maximum security of transaction information maintained on each party's
          computer system including, but not limited to, the names, addresses
          and products ordered by Retailer's customers.

     16.3 audiofile Database. User documentation for the audiofile database is
          ------------------
          attached hereto as Exhibit D. The rights to intellectual property
          related to the audiofile database are governed by the audiofile
          License, attached hereto as

                                                                     Buy.com____
                                                                      i.FILL____

                                       8
<PAGE>

          Exhibit A. Any termination of this Agreement will automatically
          terminate the audiofile License, and any termination of the audiofile
          License will automatically terminate this Agreement.

     16.4 audiotrax Database. User documentation for the audiotrax database is
          ------------------
          attached hereto as Exhibit F. The rights to intellectual property
          related to the audiotrax database are governed by the audiotrax
          License, attached hereto as Exhibit B. Any termination of this
          Agreement will automatically terminate the audiotrax License, and any
          termination of the audiotrax License will automatically terminate this
          Agreement.

     16.5 No Rights to Marks. Each party is hereby granted no rights in or to
          ------------------
          the other party's Marks. "Marks" means the trademarks, service marks,
          trade names or other marks, registered or otherwise, used by either
          i.FILL or Retailer, as applicable.

17.  TERM

     17.1 Term. The term of this Agreement begins on the date of this Agreement
          ----
          and ends two (2) years thereafter (the "Initial Term"). Unless and
          until i.FILL provides at least six (6) month's prior written notice of
          its intention not to extend the term of this Agreement or Retailer
          provides at least ninety (90) days prior written notice of its
          intention not to extend the term of this Agreement, this Agreement
          shall automatically renew for additional one (1) year terms (each a
          "Renewal Term", the Initial Term and all Renewal Terms to be
          collectively referred to as the "Term")

     17.2 Early Termination. Either party may terminate this Agreement upon
          -----------------
          thirty (30) days' written notice under the following conditions:

          17.2.1    Either party may terminate this Agreement, absent a material
                    breach, if i.FILL discontinues fulfillment services to on-
                    line customers or Retailer discontinues the on-line sale of
                    Product.

          17.2.2    i.FILL or Retailer delivers to the other party a 30-day
                    written notice of termination for a material breach of this
                    Agreement, and the other party fails to cure such a breach
                    within thirty (30) days.

18.  LIMITATION OF REMEDIES AND EXCLUSION OF WARRANTIES. IN NO EVENT SHALL
     EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT OR CONSEQUENTIAL DAMAGES,
     WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
     DAMAGES AND REGARDLESS OF THE FORM OF ACTION. ALL PRODUCT SOLD HEREUNDER IS
     SOLD "AS-IS" AND i.FILL EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED
     WARRANTIES WITH RESPECT TO PRODUCT SOLD UNDER THIS AGREEMENT, INCLUDING ANY
     IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR PURPOSE.

                                                                     Buy.com____
                                                                      i.FILL____

                                       9
<PAGE>

19.  REPRESENTATIONS AND WARRANTIES.

     19.1 i.FILL's Representations and Warranties.
          ---------------------------------------

          19.1.1    i.FILL has the right and authority to enter into this
                    Agreement.

          19.1.2    The Products delivered by i.FILL to Retailer's customers in
                    substantially the same condition as they were in when they
                    were received by Valley in Valley's distribution facility.

     19.2 Retailers Representations and Warranties.
          ----------------------------------------

          19.2.1    Retailer has the right and authority to enter into this
                    Agreement

          19.2.2    Retailer will not include any content on its website that
                    infringes on the intellectual property rights, including
                    copyright and trademark rights, of any third party.

          19.2.3    Retailer will abide by its terms of service and privacy
                    policies.

20.  INDEMNIFICATION. Both parties will, at all times, indemnify and hold the
     other party harmless from any third and all third-party claims, damages,
     liabilities, costs and expenses (including reasonable attorney's fees)
     arising out of any breach or alleged breach by such party of any warranty
     or representation made by such party in this Agreement. Both parties will
     further indemnify and hold the other party harmless for any and all third-
     party claims, damages, liabilities, costs and expenses (including
     reasonable attorney's fees) arising out of (i) any infringement or alleged
     infringement of intellectual property belonging to a third-party; or (ii)
     any violation of any applicable Federal or State law, rule, regulation, or
     ordinance.

21.  FORCE MAJEURE. Neither party will be liable for failure to perform, or the
     delay in performance of, any of its obligations under this Agreement if,
     and to the extent, that such failure or delay is caused by events
     substantially beyond its control, including, but not limited to, acts of
     God, acts of the public enemy or governmental body in its sovereign or
     contractual capacity, war, fire, floods, strikes, epidemics, quarantine
     restrictions, civil unrest or riots, freight embargoes and/or unusually
     severe weather. Lack of funds by either party shall not excuse timely
     performance. The party so affected shall use commercially reasonable
     efforts to avoid or remove such causes of non-performance or delay, and
     shall continue performance hereunder with reasonable dispatch whenever such
     causes are removed. If any such non-performance or delay continues for more
     than sixty (60) days, the unaffected party may elect to terminate this
     Agreement without liability or any liquidated or other damages upon written
     notice to the other party.

22.  GENERAL.

     22.1 Notice. All notices, including those related to product pricing,
          ------
          ordering and fulfillment policies that will have a material impact on
          the other party's

                                                                     Buy.com____
                                                                      i.FILL____

                                       10
<PAGE>

          business, shall be in writing and delivered by certified mail, postage
          prepaid and return receipt requested, or transmitted either by
          facsimile or electronic mail if confirmed contemporaneously by such
          mailing, to the addresses provided in writing, from time to time by
          the parties.

     22.2 Entire Agreement; Amendments. This Agreement constitutes the entire
          ----------------------------
          agreement of the parties concerning the subject matter hereof,
          superseding all prior proposals, negotiations and agreements
          concerning the subject matter of this Agreement. No representation or
          promise relating to and no amendment of this Agreement will be binding
          unless it is in writing and signed by authorized representatives of
          both parties.

     22.3 Assignment. This Agreement may not be assigned by either party without
          ----------
          first obtaining the other party's written consent, which shall not be
          unreasonably withheld. Subject to the foregoing, this Agreement will
          be binding upon and inure to the benefit of successors and permitted
          assigns of the parties hereto.

     22.4 Captions; Waiver; Severability. The captions appearing n this
          ------------------------------
          Agreement are inserted only as a matter of convenience and in no way
          define, limit, construe o describe the scope or interpretation of this
          Agreement. No waiver by a party of any breach of any provision of this
          Agreement will constitute a waiver of any other provision of this
          Agreement. If any provision of this Agreement shall be held invalid,
          void or unenforceable, the remaining provisions hereof shall in no way
          be affected or impaired, and such remaining provisions shall remain in
          full force and effect.

     22.5 Governing Law and Arbitration. This Agreement shall be construed and
          -----------------------------
          enforced pursuant to the laws of the State of California. If the
          parties are unable to settle any disagreements regarding this
          Agreement or the project contemplated by this Agreement, such
          disagreements shall be submitted to binding arbitration within the
          State of California under the rules of the American Arbitration
          Association as then in effect.

     22.6 Counterparts. This Agreement may be executed in one or more
          ------------
          counterparts, all of which will be considered one and the same
          agreement, and will become a binding agreement when one or more
          counterparts have been signed by each party and delivered to the other
          party. Facsimile signatures shall be considered original in all
          respects.

In witness whereof, the parties hereto have executed this Agreement effective as
of the date first above written.

i.FILL, a division of                        BUY.COM

VALLEY MEDIA, INC.

By:  _____________________________           By:  ______________________________

Its: _____________________________           Its: ______________________________

                                                                     Buy.com____
                                                                      i.FILL____

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<PAGE>

                             SCHEDULE OF EXHIBITS

                     EXHIBIT A           audiofile License

                     EXHIBIT B           audiotrax License

                     EXHIBIT C           Average Cost Movement Worksheet

                     EXHIBIT D           audiofile User Documentation

                     EXHIBIT E           Shipping Tables

                     EXHIBIT F           audiotrax User Documentation

                                                                     Buy.com____
                                                                      i.FILL____

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