EXHIBIT 10.7
PRIVATE LABEL AGREEMENT
THIS PRIVATE LABEL AGREEMENT (this "Agreement") is made and entered into
as of the 8th day of September, 1994, by and between APEX PC SOLUTIONS, INC.,
a Washington corporation ("Seller") and XXXXXX LINE, INC., a Massachusetts
corporation ("Purchaser").
R E C I T A L S
A. Purchaser desires to purchase certain switching products (the
"Products", as defined in SCHEDULE 1), which will be finished by Seller as
private label products incorporating Purchaser's artwork and trademarks.
B. Seller is willing to sell the Products to the Purchaser on the
terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
A G R E E M E N T
1. PURCHASE ORDERS. Seller shall sell Products to Purchaser in
accordance with the terms of this Agreement. Purchaser shall place orders for
Products on standard purchase order forms, however, purchase terms will be
governed by this Agreement. The purchase price for the Products, including
Purchaser's artwork, product packaging, and any user documentation relating
to the Products, shall be as set forth in SCHEDULE L attached to this
Agreement. The purchase price, together with all applicable shipping charges
and taxes, if applicable, shall be payable in full to Seller within 30 days
after Purchaser receives the invoice therefor. Purchaser shall pay a late
payment charge of 1.5% per month, or the maximum rate permitted by applicable
law, whichever is less, on any unpaid amount for each calendar month or
fraction thereof that any payments are in arrears to Seller. Purchaser shall
pay all taxes based on or in any way measured by this Agreement, the
Products, or any rights or services related thereto, excluding taxes based on
Seller's net income, but including any personal property taxes. Purchaser
shall pay all expenses related to the artwork of Purchaser to be incorporated
into the Products, and shall provide Seller with such artwork in a timely
manner.
2. TERM OF AGREEMENT. The initial term of this Agreement shall be
twelve (12) months, commencing on the date first written above ("Effective
Date"). This Agreement will be automatically renewed at the conclusion of the
initial 12-month period for successive 12-month periods unless one of the
parties indicates by written notice to the other party not less than thirty (30)
days prior to the end of any such 12-month period that it does not intend to
renew the Agreement. Notwithstanding the foregoing, the Agreement shall
remain in full force and effect and shall be applicable to any purchase
orders issued by Purchaser to Seller during the term of this Agreement until
any and all obligations of the parties under such purchase orders have been
fulfilled.
3. PRICING. Prices for the Products are set forth in SCHEDULE 1
and shall be fixed for the initial 12-month period of the term of the
Agreement. Sixty (60) days prior to the end of the initial term of the
Agreement, and sixty (60) days prior to the end of any subsequent term of
this Agreement, Purchaser and Seller shall meet to review pricing and volume
requirements for the following 12-month period of the Agreement. If
Purchaser and Seller fail to reach agreement on mutually acceptable pricing
and volume requirements for the following 12-month period, this Agreement
shall terminate effective as of the end of the then current 12-month period
of the Agreement.
4. VOLUME.
a. Purchaser shall purchase and Seller shall sell at least *
units of the Products for each * period of the initial 12-month term of this
Agreement. If Purchaser purchases fewer than * units of the Products in any *
period following the initial * period (i.e., * ), Seller shall no longer be
bound by the restrictions of SECTION 17(A) of this Agreement. The provisions
contained within this paragraph shall be Seller's sole remedy for failure of
Purchaser to purchase minimum volumes herein.
b. If at any time following the initial * period of this
Agreement, Purchaser purchases fewer than any minimum volume of the Products
required by this Agreement, Seller shall not be bound to sell the Products to
Purchaser upon the terms set forth in this Agreement, and in particular, without
limitation, shall not be bound by the restrictions of SECTION 17(A) of this
Agreement. Purchaser shall, however, have the right to purchase the Products
in lot quantities of at least * units, at a price which is at least * below any
private label price offered to a Competitor of Purchaser (as defined in
SECTION 17(A)).
c. If the failure of Purchaser to meet the minimum volumes
provided in SECTION 4(A) is due to the failure of Seller to deliver such
minimum volumes for that * period, Purchaser shall not be required to purchase
minimum volumes for that * period.
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
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5. DELIVERY. Purchaser shall advise Seller of Purchaser's
desired mode of shipment, and Purchaser shall pay all costs associated with
such mode of shipment. The Products shall be packaged in accordance with
Seller's then current packaging specifications for the mode of shipment that
Purchaser selects, and the cost of such packaging shall be included in the
purchase price set forth on SCHEDULE 1. The Products shall be delivered
F.O.B. Seller's shipping point and Purchaser thereafter assumes all risk of
loss therefor.
6. TITLE. Upon shipment, title to the Products shall vest in
Purchaser. Title in and to any user documentation and maintenance
documentation shall remain solely in Seller. subject to the payment of the
purchase price set forth in SCHEDULE 1, Purchaser shall only obtain a
nonexclusive license to distribute the user documentation to customers who
purchase the Products from Purchaser.
7. MARKETING. Purchaser shall use its best efforts to actively
market and distribute the Products through Purchaser's existing sales
organization and distribution channels. Any sale, marketing, advertising or
distribution of the Products by Purchaser or its agents shall be in
compliance with Seller's UL, TUV and CUL requirements.
8. WARRANTY. Seller warrants that, under normal use and service,
the Products shall be free from defects in material and workmanship for a
period of one year after shipment of the Products to Purchaser's customers.
The foregoing warranty shall not be transferrable to customers who purchase
the Products from Purchaser. If the Products fail to meet the warranties of
this Section 8 and Purchaser gives Seller notice thereof during the
applicable warranty period, Seller's sole obligation shall be to correct the
failure by repair, replacement, or credit for the purchase price of the
Products, as determined in Seller's sole discretion.
EXCEPT AND TO THE EXTENT EXPRESSLY PROVIDED IN THIS SECTION 8 AND IN
LIEU OF ALL OTHER WARRANTIES, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND IN NO EVENT SHALL ANY WARRANTIES UNDER THIS
AGREEMENT EXTEND, IN WHOLE OR IN PART, TO CUSTOMERS WHO PURCHASE THE PRODUCTS
FROM PURCHASER.
Seller shall not be liable to Purchaser for the warranty provisions of
this SECTION 8 if:
a. Modifications are made to the Products by someone other than
Seller;
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b. Attachments, features or devices (other than AT, PS2 or
compatible computers) are employed on the Products that are not supplied by
Seller or not approved in writing by Seller; or
c. The products are subject to misuse or abuse.
9. MAINTENANCE SERVICES AND TECHNICAL SUPPORT. During the term
hereof and for a period of * after any expiration, termination, or cancellation
of this Agreement, Seller shall offer maintenance services and technical support
to customers who purchase the Products from Purchaser. Purchaser shall forward
all calls requesting maintenance services or technical support to Seller.
Seller's personnel will identify themselves to customers of Purchaser as being
associated with Purchaser. Seller will notify Purchaser if replacements for the
Products are needed and if so, Purchaser will ship such Products directly to the
customers of Purchaser. Seller and Purchaser shall cooperate and negotiate in
good faith to arrive at a mutually acceptable rate schedule for out of warranty
repairs.
10. TRAINING. Seller shall provide * of training in the
use and maintenance of the Products, at times which are mutually acceptable to
Seller and Purchaser, at any of Purchaser's sites in the United States, as
determined by Purchaser. Seller shall be responsible for providing appropriate
instructional materials as part of the training. Purchaser shall not be
required to pay for the training sessions, but Purchaser shall reimburse Seller
for all living expenses of Seller's personnel in connection with the training
sessions. Such reimbursement shall be paid by Purchaser within ten days after
submission of an invoice therefor to Purchaser. Seller shall pay for the
travel expenses of Seller's personnel in connection with the training sessions.
11. TERMINATION.
a. Seller may terminate this Agreement at any time by
written notice in the event Purchaser:
(i) Fails to comply with any material provision of this
Agreement, and, in the case of a breach which is capable of remedy fails to
remedy same within thirty (30) days of receipt of written notification of
said breach; or
(ii) Becomes insolvent or makes an assignment for the
benefit of creditors, or a receiver or similar officer is appointed to take
charge of all or a part of the Purchaser's assets and such condition is not
cured within thirty (30) days.
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
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b. Purchaser may terminate this Agreement at any time by
written notice in the even Seller:
(i) Fails to comply with any material provision of this
Agreement, and fails to remedy same within thirty (30) days of receipt of
written notification of said breach; or
(ii) Becomes insolvent or makes an assignment for the
benefit of creditors, or a receiver or similar officer is appointed to take
charge of all or a part of the Seller's assets and such condition is not
cured within thirty (30) days.
c. Either party may terminate this Agreement in accordance
with SECTION 2 or SECTION 3 of this Agreement.
12. LIMITATION OF LIABILITY. IN NO EVENT SHALL SELLER BE LIABLE
TO PURCHASER OR CUSTOMERS OF PURCHASER FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE PERFORMANCE OR BREACH THEREOF, EVEN IF SELLER HAS BEEN
ADVISED OF THE POSSIBILITY THEREOF. SELLER'S LIABILITY, IF ANY, TO PURCHASER
OR TO THE CUSTOMERS OF PURCHASER HEREUNDER SHALL IN NO EVENT EXCEED THE TOTAL
OF THE AMOUNTS PAID TO SELLER HEREUNDER BY PURCHASER.
13. RESALE TERMS AND CONDITIONS. Purchaser's sale of the Products
to customers shall be on terms and conditions which are consistent with
Paragraph 19 of this Agreement which restricts Purchaser's sale of Products
to customers.
14. NOTICES. Any notice given under this Agreement shall be in
writing and shall be effective when delivered personally or deposited in the
mail, postage pre-paid and addressed to the parties at their respective
address as set forth below, or at any, new address subsequently designated in
writing by either party to the other:
If to Seller: Apex PC Solutions, Inc.
0000-000xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
If to Purchaser: Xxxxxx Line, Inc.
000 Xxxx Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
15. PROPRIETARY RIGHTS. All right, title and interest in and to any
copyright, patent, trademark, trade secret or other intellectual or proprietary
rights in the Products are the sole, confidential and exclusive property of
Seller, other than any artwork provided by Purchaser to be incorporated into the
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Products. No right, title or interest therein or thereto shall be acquired
by Purchaser by virtue of this Agreement other than as expressly provided
herein. Seller shall defend or settle, at its own expense, any cause of
action or proceeding brought against Purchaser which is based solely on a
claim that the products infringe any existing United states patent or
copyright. Seller shall indemnify and hold Purchaser harmless against any
final judgment that may be awarded by a court of competent jurisdiction
against Purchaser as a result of the foregoing, including any award of
attorneys' fees; provided, however, that Purchaser shall give Seller prompt
written notice of such claim and provide Seller with all reasonable
cooperation and information in Purchaser's possession.
If a claim is made that the Products infringe any issued or enforceable
patent, trademark, trade secret, copyright or other intellectual property
right or if Seller believes that a likelihood of such a claim exists, Seller
may procure for Purchaser the right to continue using the Products, modify
the Products to make them noninfringing, replace the Products with
noninfringing products of similar capability, or remove the Products and
refund the purchase price thereof.
Seller shall not be liable to Purchaser for any claim of infringement
pursuant to this SECTION 15 if such claim is based on modifications made to
the Products by someone other than Seller.
Seller's foregoing indemnity and obligation shall in no event extend, in
whole or in part, to the customers purchasing the Products from Purchaser.
The foregoing sets forth the entire liability of Seller to Purchaser and its
customers for the infringement of proprietary rights by the Products or any
portion' thereof.
Purchaser shall retain all right, title and interest in and to any
trademark, tradename, and any other property and artwork provided to Seller
in connection with this Agreement. Seller shall not use such property other
than as expressly provided herein. Purchaser shall indemnify and hold Seller
harmless against any claim brought against Seller based upon a claim that the
artwork provided by Purchaser infringes the proprietary rights of any third
parties.
16. CONFIDENTIAL INFORMATION.
a. Each party recognizes that pursuant to this Agreement, it
may receive information from the other party which is confidential. To the
extent that such confidential information ("Information") is disclosed in
furtherance of this Agreement or any purchase order issued hereunder, such
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Information shall be so disclosed pursuant to the minimum terms and
conditions listed below.
b. Information disclosed that is considered in good faith by
the disclosing party as confidential and/or proprietary shall be clearly
marked as "confidential" or "proprietary." Information not easily marked
including Information orally disclosed shall be summarized in writing and
designated confidential by the disclosing party within thirty (30) days of
its disclosure. However, all Purchaser's customers' names learned by Seller
shall be treated as confidential regardless of source.
c. Both parties agree that the party receiving Information
will maintain such Information in confidence for a period of * from the
date of disclosure of such Information, provided that Information which does
not relate directly to the Products, such as customer lists and distribution
methods, shall be held in confidence indefinitely.
d. Each party shall protect the other party's Information to
the same extent that it protects its own confidential and proprietary
Information and shall take all reasonable precautions to prevent unauthorized
disclosure to third parties.
e. The parties acknowledge that the unauthorized disclosure
of such information will cause irreparable harm. Accordingly, the parties
agree that the injured party shall have the right to seek immediate
injunctive relief in joining such unauthorized disclosure.
f. This provision shall not apply to information known to
the receiving party at the time of receipt from the other party, generally
known or available to the public through no act or failure to act by the
receiving party, furnished to third parties by the disclosing party without
restriction or disclosure, or furnished to the receiving party by a third
party-as a matter of right and without restriction or disclosure.
g. Immediately upon termination of this Agreement or at the
request of the other party, each of the parties shall promptly return all
materials in its possession containing Information of the other party.
17. *
a. *
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
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b. *
c. *
18. *
19. COMPLIANCE WITH LAWS. Seller and Purchaser shall comply with
all applicable laws, regulations, rules, orders, and other requirements, now
or hereafter in effect, of governmental authorities having jurisdiction.
Without limiting the generality of the foregoing, Purchaser shall comply with
all such requirements relating to the import, export, or re-export of the
Products or any other items subject to this Agreement (including; but not
limited to, the requirements under the U.S. Export Administration Act,
Regulations of the Department of Commerce or its successors, executive
orders, and other export controls of the United States of America).
Purchaser shall not export or re-export, or authorize or permit the export or
re-export of, any such items to any Restricted Country (as defined below)
without first obtaining the permission of the United States Office of Export
Administration or its successors. A "Restricted Country" shall mean any
country to which export or re-export of the Products is prohibited without
first obtaining the permission of The United states Office of Export
Administration or its successor, and includes, without limitation, Libya,
Cuba, and North Korea.
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
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20. MISCELLANEOUS.
a. Any obligations and duties which by their nature extend
beyond the expiration or earlier termination of this Agreement shall survive
any such expiration or termination and remain in effect.
b. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, such provision shall be
enforced to the fullest extent permitted by applicable law and the validity,
legality and enforceability of the remaining provisions shall not in any way
be effected or impaired thereby.
c. Any waiver of any kind by a party of a breach of this
Agreement must be in writing. Shall be effective only to the extent set
forth in writing and shall not operate or be construed as a waiver of any
subsequent breach.
d. This Agreement shall be construed under and governed by
the laws of the State of Washington. The parties agree that King County,
Washington, shall be the proper forum for any action brought under this
Agreement.
e. This Agreement contains the entire agreement of Seller
and Purchaser with regard to the subject matter of this Agreement. This
Agreement entirely supersedes and replaces that certain letter of intent
dated July 5, 1994.
f. Neither party may assign its rights or obligations under
this Agreement without the other party's prior written consent.
g. The provisions of this Agreement are for the benefit of
the parties hereto and not for any other person.
h. Both parties are acting in separate capacities and not as
employees, partners, joint venturers, associates, or agents of one another.
With regard to the performance of this Agreement, each party acknowledges
that it does not have the authority to act for or in the name of the other
party or to commit the other party in any manner whatsoever. The employees
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or agents of one party shall not be deemed or construed to be the employees
or agents of the other party for any purpose whatsoever.
DATED as of the date first above written.
XXXXXX LINE INC., a Massachusetts
corporation
By /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Its President
------------------------------
APEX PC SOLUTIONS, INC., a
Washington corporation
By /s/ Xxxxx Xxxxx
----------------------------------
Its General Manager
------------------------------
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SCHEDULE 1
PRODUCTS AND PRICING
1. PRODUCTS. The products consist of (a) Seller's 8 port desktop
concentrator unit, EL-81DT, as finished with Purchaser's artwork and
trademarks, (b) Seller's 7' Cable Set, and (c) Seller's 12' Cable Set.
2. PRICING. The price of the Products shall depend on the volume
ordered by Purchaser, as follows:
===============================================================================
* * *
PRODUCT LIST PRICE PER MONTH PER MONTH PER MONTH
-------------------------------------------------------------------------------
8 Port Switch * * * *
-------------------------------------------------------------------------------
7' Cable Set * * * *
-------------------------------------------------------------------------------
12' Cable Set * * * *
===============================================================================
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
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[LOGO]
November 20, 1996
Xx. Xxxxx Xxxx
Vice President
Xxxxxx Line Corporation
000 Xxxx Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Dear Xxxxx,
Pursuant to our conversation regarding market changes and price
reductions on LMS four and eight port switches, Apex PC Solutions, Inc. can
make the following announcement. Effective immediately, unit price of the
LC94-M2 and LC98-M2 will be reduced to * and * respectively.
Open Xxxxxx Line orders will be adjusted to reflect new prices prior to
shipment. New orders will be accepted at the lower price and in accordance
with all aspects of the existing contract in force and our * volume
agreement. In addition, please use this letter to confirm the previously
offered price of * for Xxxxxx Line cable number LC97-MM (std. 12 ft.
cable).
Apex intends to publish a competitive analysis of competitive product as
a sales aid and a duplicate copy will be sent to Xxxxxx Line. Recent price
moves in the market represent unique challenges to Apex and its OEM
customers. It is important to note that Apex is acutely aware of the
changing market and will act accordingly to insure that our products address
the marketplace.
Sincerely,
Xxxxx Xxxxxxxx
Vice President, Sale & Marketing
cc Xxxx Xxxxxxx, Xxxxxx Line
Xxxxx Xxxxx
Xxxx Xxxxxxx
* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission.
