Lynnda Speer, Donor, et al. - Page 8

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          purpose.  In addition, the Local Software was continually                   
          modified, improved, and expanded throughout this period to handle           
          HSC’s changing needs.                                                       
               Initially, all member orders were accumulated at the end of            
          the day and sent to Pioneer to be keyed into the Local Software             
          on Pioneer’s IBM System.  The Local Software would determine the            
          location of inventory and determine which items needed to be                
          moved from the warehouse to the marts and among the marts so that           
          a sufficient quantity of inventory was on hand by 6 a.m. the next           
          morning at the mart where the member was to pick up the                     
          merchandise.  The Local Software also generated a picking slip,             
          which provided the HSC personnel with the member’s order and the            
          specific location of the items so that member orders could be               
          filled quickly.  Eventually, computer terminals were placed in              
          the broadcast studio and in the marts so that inventory could be            
          tracked more quickly and accurately.                                        
               In 1985, Mr. Speer and Mr. Paxson were exploring ways to               
          expand HSC’s market.  At this time, televised home shopping was             
          new outside the Tampa Bay area.  Mr. Speer and Mr. Paxson                   
          organized Home Shopping Network, Inc. (HSN), in order to try to             
          exploit this new, but uncertain, business opportunity.  HSN is a            
          Delaware corporation that was organized to conduct the business             
          of selling merchandise at retail prices through televised                   








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