DISTRIBUTOR AGREEMENT
EXHIBIT
10.6
This
Distributor Agreement is entered into as of this 22nd day of February, 2008 (the
“Effective Date”) between Avnet Logistics U.S., LP, a Texas corporation having
its principal place of business at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx
00000 (“Distributor”), and Sonasoft Corp, a California corporation., having its
principal place of business at 0000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000-0000 (“Supplier”).
1.
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APPOINTMENT/WORLDWIDE
APPLICATION
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1.1
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This
Agreement states the only terms and conditions under which Distributor
will purchase Products, meaning products sold to Distributor by Supplier,
except for Product identification, quantity and shipping
location.
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1.2
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Supplier
grants to Distributor the non-exclusive right to distribute the Products
worldwide (“Territory”) Distributor’s international
subsidiaries are authorized to purchase from Supplier’s
subsidiaries. Distributor is further authorized to resell
Products globally and export the products to non-embargoed
countries.
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1.3
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Supplier
will not sell product to Distributor’s existing customers or sell custom
Products used in Distributor’s integration project for new customers
without Distributor’s express permission. Products listed on
Exhibit A are considered standard unless idenitified as custom Products by
Supplier.
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2. TERM
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2.1
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The
term of this Agreement will be twelve months from the Effective Date of
this Agreement. The Agreement is automatically renewed for
additional one year periods at all anniversary dates unless this Agreement
is otherwise terminated.
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3. DUTIES
OF DISTRIBUTOR
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3.1
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Distributor
will use reasonable commercial efforts to promote the sale of the Products
within the Territory.
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4. DUTIES
OF SUPPLIER
4.1 At
no cost to Distributor, Supplier will provide:
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a)
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Information. Sufficient
quantities of marketing materials for sales programs and any other
information Distributor reasonably requests regarding the
Products.
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b) Training. Adequate
training.
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c)
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Technical Support and
Contact Information. Technical support for all
Products. Supplier’s technical support contact information,
procedures for escalation of technical questions and other resource
information Distributor reasonably
requests
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d)
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Certificates of
Origin. Supplier will provide Certificates of Origin for
the Products in the form Distributor requests and Supplier will promptly
update such Certificates.
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4.2
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Supplier Quality
Handbook. Supplier will make best efforts to attain the
goals established in the Avnet Supplier Quality Handbook as may be amended
from time to time. Supplier will work with Distributor to
establish improvement plans and performance milestones in those areas when
Supplier falls under the published
goal.
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4.3 Ethical
Practices.
Supplier will:
a) conduct
business in a manner that reflects favorably upon Distributor’s goodwill and
reputation;
b) avoid
deceptive, misleading or unethical practices;
c) make
no false or misleading representations with regard to Distributor;
and
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d)
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not
solicit orders from any other Distributor that Supplier has knowledge
engages in illegal or deceptive trade practices or any other practices
prohibited under this Agreement.
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5. PRICE/PRICE
CHANGE
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5.1
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Pricing. Distributor
will pay the prices for Products as set forth in Exhibit A. If
Distributor’s Purchaser has special pricing from Supplier, Supplier will
honor this price to Distributor. Supplier may change the prices
contained in Exhibit A, but the change will not be effective to
Distributor unless Supplier gives at least thirty (30) days advance
written notice to Distributor.
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5.2
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Price
Decrease. If Supplier decreases the price
of any Product, Supplier will credit Distributor the difference between
the price paid by Distributor and the decreased price multiplied by the
amount of affected Products in Distributor’s inventory, in transit from
Supplier, or sold by Distributor during the sixty (60) days prior to such
decrease. Supplier will invoice Distributor for any unshipped
Products and pending Purchase Orders at the decreased
price. All Products shipped on or after the effective
date of any price decrease will be shipped and invoiced at the price in
effect at the time of shipment.
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5.3
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Price
Increase. Supplier will ship and invoice all Products
shipped after the effective date of any price increase at the price in
effect at the time of order
placement.
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6. TAXES
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6.1
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All prices quoted are exclusive
of all taxes. Supplier will invoice Distributor for all taxes
applicable to sales of the Products, itemized by type and jurisdiction,
which Supplier is required by law to collect from Distributor,
itemized by type and
jurisdiction.
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7. PAYMENT
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7.1
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Invoicing and
Payment. Supplier will invoice Distributor via
electronic or fax transmission no later than the business day after
shipment or delivery of Products. Such invoices will be due
within sixty (60) days of the invoice date. Distributor will
also receive an additional two-percent (2%) discount if payments are made
within fifteen (15) days from the invoice
date.
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7.2
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Credits. Distributor
has the right of offset against Supplier for programs, promotions, special
pricing, rebates, and for any Distributor returns
as described in Section 11.
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8. SHIPMENT/RISK
OF LOSS
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8.1
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Packing and
Labeling. All packing materials and methods for Products
will conform to standard commercial practices. Supplier will
ensure that the SKU on the packing slip matches the SKU on the price list
and invoices. Supplier will xxxx each Product (or with respect
to software, the tangible media therefore) with mutually-agreed upon bar
code labels.
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8.2
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Delivery. Supplier
is responsible for all freight and insurance charges. Supplier
will notify Distributor immediately of any delays or inability to deliver
Product.
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8.3
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Title and Risk of
Loss. Title (exclusive of the Supplier retained
intellectual property rights in software) and risk of loss will pass to
Distributor upon delivery of the Products to Distributor’s
dock. If Supplier ships directly to Distributor’s customer,
title will pass upon shipment.
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9. ORDERING
AND REPORTING
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9.1
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Ordering. If
Supplier offers Distributor special pricing, additional discounts or any
other terms pursuant to program offers, Distributor may adjust the prices
of and discounts for Products in its Purchase Orders to reflect such
terms. Each Purchase Order will be deemed accepted by Supplier
unless Supplier sends written notice to Distributor of the rejection
within two (2) business days after transmission from
Distributor. Distributor will have no obligation to order any
minimum quantity of Products.
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9.2
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Order
Changes. Distributor may cancel or reschedule standard
Products any time prior to Supplier’s ship date without
penalty. Distributor may reschedule custom Products up to
forty-eight (48) hours prior to the scheduled ship date but such
reschedule will not exceed an additional sixty (60)
days. Distributor may not cancel custom Products within two (2)
weeks of scheduled ship date.
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10. WARRANTIES
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10.1
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End User
Agreements. Supplier warrants that the end user license
agreement or any agreement between Supplier and end user for Products sold
through the two-tier distribution channel will be no less favorable than
those provided for Products sold through a single-tier distribution
channel or direct sales model. Distributor makes no warranty to
end users regarding the Products. Distributor assumes no
responsibility or liability for misuse or failure of Products to perform
as Supplier specifies or failure of Supplier to perform
services. Supplier’s agreements with the end user solely
control end users’ responsibilities and
rights.
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10.2
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Warranties to
Distributor. Supplier warrants to Distributor and its
customers that:
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a)
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the
Products conform to their published documentation and be free from defects
in design, workmanship and materials under normal use for the life of the
product;
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b)
Supplier owns all right, title and interest in and to the Products and related
materials; and
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c)
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no
suit or proceeding is pending or threatened alleging that any Products,
regardless of their combination with other components, infringe upon or
misappropriate the intellectual property rights of any other person or
entity; and
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d)
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the
Products are in accordance with its standard warranty as set forth in
Exhibit C. Distributor is authorized to pass warranty through
to Distributor's customers and to end users. The warranty
period, as stated in Exhibit C, begins to run upon delivery of the Product
to the end user. Either Distributor or reseller customer or end
user may return any Product under the terms of the warranty but if
Supplier requests that Distributor handle warranty returns, Distributor
may charge Supplier with a handling fee for such returns;
and
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e)
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the
Products sold under this Agreement comply with the ROHS and WEEE
directives of the European Union, as well as the enabling directives of
the pertinent member states, or other regulatory requirements, and that
the Products are lead-free.
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10.3
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Section
10 and Exhibit C are deemed non-confidential and Distributor may reveal
the content of Section 10 and Exhibit C to its
customers.
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11. STOCK
ROTATION AND OTHER RETURNS
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11.1
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Return
Rights. Distributor may return to Supplier the following
Products for credit at the invoice
price:
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a)
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Inventory. Products
in Distributor’s inventory, whether or not in their original, sealed
condition, if the aggregate dollar value of such Products does not exceed
fifteen percent (15%) of Distributor’s purchases of Products during the
ninety (90) days preceding such return. For the first year of
the contract, Distributor may return any Product in its inventory that is
aged ninety (90) days or more. Products would be required to meet
the eligibility requirements for stock rotations. Products
returned under clauses (b) or (c) or (d) below do not count toward such
limit.
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b)
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End of Life/Obsolete
and Functionally Discontinued Products. If Supplier
discontinues Products or makes Products obsolete, Supplier will notify
Distributor at least thirty (30) days prior to the effective date of such
change through Distributor’s electronic end of life notification
system. Distributor will then notify Supplier of the affected
Products in its inventory for Supplier’s repurchase. Within
thirty (30) days of receipt of Distributor’s notice, Supplier will provide
Distributor with instructions concerning return or destruction of the
affected Products.
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c)
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Dead On Arrival
(DOA)/In Process Failures (IPF)/Defective
Products. Products that are non-operative or defective
without any requirement to test for such defect or that do not
operate. Supplier will also provide funding in the amount of
two percent (2%) of the value of Product sold to Distributor for
Distributor to destroy or scrap defective
product.
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d)
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Recalled
Products. Products that are functional and not
DOA/Defective Products but are recalled by
Supplier.
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11.2
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Charges. Distributor
will pay shipping and insurance costs for Products returned under Section
11.1(a). Distributor will ship all Products returned under to
Section 11.1(b) or (c) with freight collect to Supplier, and Supplier will
bear the costs of insurance.
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12. INTELLECTUAL PROPERTY
INDEMNIFICATION.
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12.1
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Supplier
will indemnify, defend, and hold Distributor, its successors, assigns,
customers and end-users harmless against all loss, damages, costs and
expenses (including reasonable attorneys’ fees and costs of establishing
rights to indemnification and any settlement) based on any claims,
demands, suits, proceedings and actions (“Claims”), in connection with any
alleged infringement of any patent, copyright, trademark, trade secret or
other intellectual property right of a third party, including any Claims
that the Product, or the process, design, or methodology used to
manufacture the Product infringes any third party patent, copyright,
trademark, trade secret or other intellectual property
right.
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12.2
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Distributor
will provide Supplier with written notice of any such Claims, grant full
authority to Supplier to defend and settle such Claims, and upon
Supplier’s request, provide reasonable assistance and information, at
Supplier’s reasonable cost and
expense.
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12.3
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If
a Product becomes the subject of a Claim or Distributor is enjoined from
selling or using a Product, Supplier
will:
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a)
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procure
for Distributor the right to sell and use the
Product;
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b)
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provide
Distributor with replacement or modified Product that is non-infringing;
or
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c)
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if
Supplier is unable to provide the remedies in 12.3(a) or (b), refund the
full purchase price for such
Product.
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12.4
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Section
12 is deemed non-confidential and Distributor may reveal the content of
Section 12 to its customers.
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13. GENERAL
INDEMNIFICATION
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13.1
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Supplier
will indemnify and hold the Distributor harmless of and from any and all
liabilities, losses and damages (including costs, expenses and attorneys'
fees, and costs of establishing rights to indemnification) resulting from
any claim of any of Distributor's customers or any other third party,
including employees of Distributor or Supplier, for death, personal
injury, breach of warranty, or damage to property arising out of, or in
any way connected with, the Products or the use or operation
thereof.
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14. INSURANCE
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14.1
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Supplier
will name Distributor as an additional insured on any and all product
liability insurance policies it may have in effect with respect to any
Products
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15. LIMITATION
OF LIABILITY
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15.1
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EXCEPT
FOR SELLER’S LIABILITY UNDER SECTION 12, INTELLECTUAL PROPERTY
INDEMNIFICATION, AND SECTION 17 CONFIDENTIALITY, UNDER NO CIRCUMSTANCES
WILL DISTRIBUTOR OR SUPPLIER BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT
OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION, LOST
PROFITS). THE PRICE STATED FOR THE PRODUCTS IS A CONSIDERATION
IN LIMITING SUPPLIER’S LIABILITY.
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16. TERMINATION
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16.1
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Termination for
Convenience. Either party may terminate this Agreement
without cause and at any time upon giving sixty (60) days prior written
notice to the other party. Such termination will be effective
on the date stated in the notice.
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16.2
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Termination for
Cause. Either party may terminate this Agreement
immediately for cause in the event the other
party:
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a)
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Becomes
insolvent; or
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b)
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Assigns
or transfers, either voluntarily or by operation of law, any or all of its
rights or obligations under this Agreement without having obtained the
prior written consent of the other party;
or
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c)
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Upon
the filing of a petition by or against it under any state or federal
bankruptcy or insolvency law, fails to tender to the other party a
guaranty of its obligations under this Agreement by a person, firm or
other entity having a net worth of at least eight-five percent (85%) of
its own net worth as of the commencement of this Agreement, such guaranty
to be in a form satisfactory to the other party;
or
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d)
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Fails
to perform any of its material obligations under this Agreement and fails
to cure such default within thirty (30) days after written
notice.
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16.3
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Effects of
Termination:
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a)
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If
Agreement is terminated, Supplier will repurchase any or all unsold
Products in Distributor's inventory or in transit to Distributor on the
effective date of termination and any other marketing
material. The repurchase price for such unsold Products and
other material will be the actual net invoice price paid by Distributor
less any prior credits.
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b)
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If
Supplier terminates under Section 16.1, or Distributor terminates under
Section 16.2, then Supplier will pay all freight charges associated with
such repurchase of Products under this Section 16.3. If
Distributor terminates under 16.1, or Supplier terminates under Section
16.2, then Distributor will pay the freight
charges.
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c)
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Distributor
will return all Products under this Section 16 in unused, factory-shipped
condition and in original cartons or the
equivalent.
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d)
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After
any termination of this Agreement, Supplier will sell to Distributor any
Products that Distributor is contractually obligated to furnish to a
customer if Distributor orders such Products within fifteen (15) days
after the effective date of
termination.
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17. CONFIDENTIALITY
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17.1
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If
either party receives written information which is marked "Confidential"
or "Proprietary" by the other party, the receiving party will not use such
information except in the performance of this Agreement, and to treat such
information in the same manner as it treats its own confidential
information.
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17.2
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The
obligation to keep information confidential will not apply to any such
information that has been disclosed in publicly available sources; is,
through no fault of the party receiving the confidential information,
hereafter disclosed in a publicly available source; is in the rightful
possession of the party receiving the confidential information without an
obligation of confidentiality; or is required to be disclosed by operation
of law.
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17.3
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The
obligation not to disclose will be for a period of two (2) years from
receipt of confidential
information.
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18. USE
OF TRADEMARKS/TRADENAMES
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18.1
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Marketing. The
parties grant each other a nonexclusive, royalty-free license to include
and distribute each other’s information in any Distributor or Supplier
developed communication materials as long as both parties comply with each
other’s trademark usage policies and guidelines. Distributor
will have the right to pass on this right of usage to its re-seller
customers. Any fees will be mutually agreed upon prior to
inclusion. Supplier and Distributor may use each other’s logos,
trademarks and trade names internally or unofficially without
restriction.
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18.2
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Either
party may make general statements to confirm the existence of the
distribution relationship between the parties, and Supplier will obtain
Distributor’s prior written permission for such
statements. Supplier will not use Distributor’s name (except in
connection with such statements), logos, trademarks or other intellectual
property rights without Distributor’s prior written
consent. Supplier is responsible for official public relations
and formal press releases regarding the
Products.
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19. SOFTWARE
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19.1
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Software
Licensing. If the
Product includes software, Distributor may pass through software licenses
necessary for use of the Product to its customers or end
users. Distributor, its customer or end-user will negotiate and
agree as to custom or unique terms relevant to such licensing, and any and
all associated fees.
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19.2
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Proprietary
Rights. Supplier retains all rights to the Products not
expressly granted to Distributor in this Agreement. Distributor
may not copy the Products except for archival purposes, unless Distributor
places Supplier’s proprietary rights notices on such
copies. Distributor may not, and may not authorize any third
party to, copy, modify, translate, reverse engineer, decompile,
disassemble or otherwise attempt to determine the source code from the
Products or create or attempt to create any derivative works from the
Products, except to the extent applicable law permits despite this
restriction or approved by Supplier; any such copies, modifications,
translations or other derivative works will be the sole and exclusive
property of Supplier or its applicable licensors. Distributor
may not use the Products in any timesharing or service bureau
arrangement.
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20. GOVERNMENTAL
LAWS, REGULATIONS AND CONTRACT CONDITIONS
20.1
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If
Distributor’s customers elect to sell Supplier’s Products (including
supplies, software, documentations or services) to the U.S. Government or
to a prime contractor selling to the U.S. Government, the Products are
"commercial items" as that term is defined at 48 C.F.R.
2.101. Supplier will comply with provisions of FAR 52.244-6,
Subcontracts for Commercial Items and Commercial Components. Should
U.S. Government End Users acquire Products that consist of "commercial
computer software" and "commercial computer software documentation" as
such terms are used in 48 C.F.R. 12.212, their rights will be consistent
with those rights set forth in 48 C.F.R. 12.212 which generally limits
their rights to the licenses customarily provided by Supplier to the
public.
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20.2
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Supplier
will also provide the information necessary to assist Distributor with
analysis of DFARS 252.225-7014 (Alt 1), Preference for Domestic Specialty
Metals (Xxxxx Amendment) and other applicable federal
statutes.
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20.3
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Supplier
will make a good faith effort to determine whether forced or indentured
child labor was used to mine, produce or manufacture any Products
furnished under this agreement. Supplier may be required to
certify that it is not aware of any such use of child
labor.
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21. INTERNATIONAL
SALES OF INTEGRATED SOLUTIONS
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21.1
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Distributor
is authorized to sell and ship integrated solutions containing the
Products outside of the defined Territory under the following
conditions:
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a) The
Product is combined with third party components to create a unique solution or
mechanism.
b) Products
are sold or shipped in compliance with U.S. export laws and
regulations.
22. GENERAL
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22.1
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Independent
Contractors. Supplier and Distributor are independent
contractors and each is engaged in the operation of its own business and
neither will be considered the agent of the other for any
purpose. Nothing contained in this Agreement will be construed
to establish a relationship that would allow either party to make
representations or warranties on behalf of the other except as expressly
set forth herein.
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22.2
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Assignment. Neither
party may assign this Agreement in whole or in part without the prior
written consent of the other, which will not be unreasonably
withheld. This Agreement will be binding upon and inure to the
benefit of the parties and their successors and
assigns.
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22.3
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Entire
Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter and
supersedes all related prior agreements between the
parties. Amendments to this Agreement must be in writing,
signed by the duly authorized officers of the parties, specifically
stating that such amendments are made pursuant to this Section
22.3.
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22.4
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No Implied
Waivers. The failure of either party at any time to
require performance by the other of any provision will not affect the
right of such party to require performance at any time after, nor will the
waiver of either party of a breach of any provision be taken or held to be
a waiver of a provision itself.
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22.5
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Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction will be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in
that jurisdiction or affecting the validity or unenforceability of such
provision in any other
jurisdiction.
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22.6
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Survivorship. All
obligations and duties of the parties that by their nature extend beyond
the expiration or termination of this Agreement, will survive and remain
in effect beyond any expiration or termination
hereof.
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22.7
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Force
Majeure. Neither party will be liable for failure to
fulfill its obligations under this Agreement or any purchase order issued
hereunder or for delays in delivery due to causes beyond its reasonable
control, including, but not limited to, acts of God, acts of terrorism,
epidemic, acts or omissions of the other party, man-made or natural
disasters, strikes, delays in transportation or inability to obtain labor
or materials through its regular sources. The time for
performance of any such obligation will be extended for the time period
lost by reason of the delay.
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22.8
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Conflicting
Terms. The parties agree that the terms and conditions
of this Agreement will prevail notwithstanding contrary or additional
terms in any purchase order, sales acknowledgment, confirmation or any
other document issued by either party affecting the purchase or sale of
Products.
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22.9
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Governing
Law. This Agreement will be interpreted in accordance
with the laws of the State of Arizona without reference to Arizona’s
conflict of laws principles. The United Nations Convention for
the International Sale of Goods shall not apply. Supplier agrees that it
will be subject to personal jurisdiction within the State of
Arizona.
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective
as of the date first above set forth.
SUPPLIER: | DISTRIBUTOR: |
Avnet Logistics U.S., LP | |
By:/s/ Vas Srinivasan | By: /s/ Xxxx Xxxxxxx |
Name:Vas Srinivasan | Name:Xxxx Xxxxxxx |
(Typed or Printed) | (Typed or Printed) |
Title:Vice President of Marketing | Title:GFO |
Date:February 21, 2008 | Date:February 28, 2008 |