1
EXHIBIT 10.5
XXXXXX MICRO START-UP AGREEMENT
THIS XXXXXX MICRO START-UP AGREEMENT ("Agreement"), dated this 11th day of
March, 1996, is made by and between XXXXXX MICRO, INC. ("Ingram"), a California
corporation, with its principal place of business at 0000 X. Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000 and PIRANHA INTERACTIVE PUBLISHING, INC., a Arizona
corporation, with its principal place of business at 0000 X. Xxx Xxxx, Xxxxx
00-000, Xxxxxxx, Xxxxxxx 00000 ("Vendor").
RECITALS:
WHEREAS, Ingram is engaged in the sale and distribution of microcomputer
products; and
WHEREAS, Vendor is engaged in the manufacture, production and supply of
microcomputer products, ("Merchandise"); and
WHEREAS, Ingram desires to purchase Merchandise from Vendor for sale and
distribution to Xxxxxx'x resellers on a worldwide basis pursuant to the terms
and conditions of this Agreement;
NOW, THEREFORE, in consideration of the terms and conditions set forth herein,
the parties agree as follows:
1. Order Fulfillment. Vendor warrants its fulfillment of all Xxxxxx'x orders (so
long as not rejected) promptly and completely. Vendor shall endeavor to make
such fulfillment in accordance with its historic fulfillment of such orders.
In no event shall an order filled in over twenty (20) days be prompt, nor
shall an order with less than 80% fill be considered complete.
2. Delivery of Merchandise. Vendor shall deliver all Merchandise as designated
in Xxxxxx'x Purchase Orders ("P.O.") unless Vendor rejects the P.O. within
ten (10) days of P.O. date. Merchandise will be shipped regular/ground F.O.B.
Xxxxxx'x warehouse unless otherwise indicated on such P.O. and pre-approved
by Vendor. Vendor shall bear all shipping costs and risk of loss or damage to
Merchandise in transit. Risk of loss to Merchandise will pass to Ingram upon
receipt thereof; Ingram will maintain insurance coverage adequate to cover
the normal cost of Merchandise.
[*]
4. Product Marking. Vendor shall clearly xxxx on the packaging of each unit of
Product the Product's name and computer compatibility. Such packaging shall
also bear a machine-readable bar code identifier scannable in standard ABCD
format which identifies the Product and its serial number and fully complies
with all conditions regarding standard product labeling set forth in Xxxxxx
Micro's Guide To Bar Code: The Product Label, as
[*] Confidential portion deleted and filed separately with the Securities and
Exchange Commission.
2
amended from time to time. Ingram shall charge a one dollar ($1.00)
chargeback to Vendor for each unit of Product not in compliance with this
Product marking section.
5. Returns of Merchandise.
x. Xxxxxx may return any Merchandise, including Merchandise returned by
Ingram customers, for credit against open invoices. Unsold Merchandise
shall be inclusive of Merchandise returned by Ingram customers. Such
returns shall be limited to once per month, and shall be made with advance
notice to Vendor as to estimated arrival date. Upon advance notice of
returns, Vendor shall provide Return Authorization within seven (7) days
of notice. Ingram shall bear expense and risk of loss of return shipment.
Vendor shall issue payment to Ingram for such returned Merchandise if no
balance is then outstanding. Vendor shall pay regular/ground return
shipping for detective and outdated merchandise. Ingram shall pay
regular/ground shipping for stock balance/rotation returns.
b. Upon Vendor notice of expiration of this Agreement to sell any
Merchandise, Ingram shall use best efforts to return all affected
Merchandise within one hundred eighty (180) days of such notice.
c. Vendor shall issue an immediate credit for purchase price plus all
regular/ground return freight charges for defective Merchandise, and
Merchandise returned as defective by Ingram customers. Upon Vendor recall
of Merchandise due to defects, revisions, or upgrades, Ingram shall
provide reasonable assistance, at Vendor's expense, in such recall.
x. Xxxxxx'x right to return Merchandise shall survive the term and
termination of this Agreement. Should Ingram have a balance due upon
reconciliation of the account for Merchandise returns, freight
chargebacks, advertising credits, or other upon end of term or
termination, Vendor shall issue payment therefor within thirty (30) days
of such term or termination. Ingram shall use best efforts to return all
unsold Merchandise within one hundred eighty (180) days of termination of
the Agreement.
6. Sales and Selling Price. Xxxxxx'x selling prices to its resellers shall be at
Xxxxxx'x sole discretion and control. Vendor shall have the right to change
the list price of any Product upon giving thirty (30) days' prior written
notice to Ingram. In the event that Vendor shall raise the list price of a
Product, all orders for such Product placed prior to the effective date of
the price increase shall be invoiced at the lower price.
7. Price Protection. In the event that Vendor reduces the price of any Product
or offers the Product at a lower price, including raising the discount
offered for U.S. based Distributors/Resellers, Vendor shall promptly credit
Ingram for the difference between the invoice price charged to Ingram and the
reduced price for each unit of Product held in inventory by Ingram on the
date the reduced price is first offered. Vendor will also credit Ingram for
the difference between the invoice price charged to Ingram and the reduced
price for each unit of Product held in inventory by Xxxxxx'x customers on the
date the reduced price is first offered by Vendor if Xxxxxx'x customers
request a credit resulting from
3
Vendor's price reduction. Should any of Xxxxxx'x customer's request a price
adjustment as outlined in this Section , Ingram shall provide for an
independent third party audit of that customer's inventory upon Vendor's
reasonable request and at Vendor's expense. Ingram will use commercially
reasonable efforts to provide inventory reporting of its customer's
inventory.
8. Records. Vendor shall furnish documentation with each shipment to and return
of Merchandise from Ingram. Ingram shall keep accurate records of all
Merchandise sales and returns, and monthly inventory reports shall accompany
Ingram payment. Ingram shall reconcile its account with Vendor upon end of
term or termination of the Agreement. Vendor shall respond to any Ingram
request for reconciliation within thirty (30) days.
9. Term. The initial term of this Agreement shall be one (1) year. Thereafter,
the Agreement shall automatically renew for additional one (1) year periods.
10. Termination. Either party may terminate the Agreement, with or without
cause, with ninety (90) days advance written notice. At the end of term or
termination of this Agreement, Ingram may return Merchandise in lieu of
payment on account for one hundred eighty (180) days. At the end of the one
hundred eighty (180) days, Ingram may keep Merchandise and pay Vendor
therefor. Prices and payment schedule for such Merchandise shall be as
mutually agreed at that time. If Vendor and Ingram are unable to agree upon
such prices and payment schedule within ten (10) days following the
expiration of said one hundred eighty (180) day period, Ingram will return
all Merchandise for credit, or if there is a balance owed to Ingram, Vendor
shall pay Ingram within thirty (30) days.
11. Payment. Vendor shall issue invoices concurrently with Product shipments to
Ingram. [*] Ingram will provide weekly sales reports by its
Electronic Bulletin Board.
12. Bulletin Board System (BBS). Ingram will provide weekly sales reports by its
electronic BBS. The standard reports will include sales by zip code, state,
product/quantity sold and the detailed Vendor Buying Report. Vendor shall
allow Ingram a [*] percent ([*]%) functional discount off total invoice
amount to offset the cost of Xxxxxx'x BBS.
13. Marketing/Advertising. Vendor and Ingram agree to conduct joint marketing
and advertising for the Merchandise as mutually agreed by the parties in
writing. Both parties agree to cooperate in the planning and funding of such
advertising. Xxxxxx'x marketing and advertising costs incurred in accordance
with such agreement shall be pre-approved by Xxxxxx'x buyer and prepaid by
Vendor via check to Ingram. Vendor shall make no marketing, advertising, or
promotional commitments to Reseller or other third parties which otherwise
obligate Ingram without the written approval by Ingram in advance of the
planned event.
[*] Confidential portion deleted and filed separately with the Securities and
Exchange Commission.
4
14.Warranties. The Merchandise is warranted only to the end-user as set forth
in the license agreement contained in the Merchandise packaging. NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE MADE BY VENDOR
WITH RESPECT TO THE MERCHANDISE. Ingram shall not extend any additional
warranties to any resellers or end-users of the Merchandise. In no event will
Vendor be liable for any lost profits or any other incidental or
consequential damages, even if Vendor has been advised of the possibility of
such damages.
15.Indemnity. Vendor shall defend, indemnify, and hold harmless Ingram from and
against any claims, demands, liabilities, or expenses (including reasonably
attorney's fees and costs) for any injury or damage, including, but not
limited to, any personal or bodily injury or property damage, arising out of
or resulting in any way from any defect in Merchandise. This duty to
indemnify shall be in addition to Vendor's warranty obligations.
Vendor shall defend, indemnify and hold Ingram harmless from and against all
damages and costs incurred by Ingram due to claims of infringement of any
patents, copyrights, trademarks, trade secrets, or other proprietary rights
in the manufacture or marketing of Merchandise; provided that, Ingram
promptly notifies Vendor of the infringement claim. Upon claim of
infringement, Vendor may, at its expense and option, either procure the right
to continue using any part of Merchandise, replace same with non infringing
Merchandise, or modify Merchandise to make it non-infringing; should Vendor
be unable or unwilling to replace, modify, or procure right to continued use
of Merchandise within ninety (90) days of claim notification, Ingram may
return Merchandise for a full credit or cash refund, at Xxxxxx'x option.
16.Competitive Price. Vendor agrees to offer its most competitive prices to
Ingram. If Vendor offers a lower price, including, but not limited to, sales
price, volume discount, dating, advertising, freight cost, or back haul
allowance to any other U.S. based Distributor/Reseller, then Vendor will
immediately offer that lower price to Ingram, and shall apply such lower
price to all Ingram orders not yet shipped. In addition, Vendor will issue a
credit to reflect the difference in price for all affected inventory in
Xxxxxx'x or its resellers inventory on the date of the price decrease.
17.Notices. All notices or other communications made hereunder shall be in
writing and sent by U.S. certified or registered first-class mail prepaid,
and receipt thereof shall be deemed to be two (2) days from date postmarked.
18.Entire Agreement/Law. This Agreement contains all understandings and
agreements between the parties and may not be modified or supplemented except
in writing signed by both parties. The parties agree that the Agreement shall
be governed by the law of the State of California, excepting that body of
law concerning conflicts of law.
5
The signer represents that he/she has read this Agreement, agrees, and is an
authorized representative of their respective party.
XXXXXX MICRO, INC. PIRANHA INTERACTIVE PUBLISHING, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxxxx
____________________________ ___________________________
Name: Xxxxx X. Xxxxx Name: Xxxx Xxxxxxxxx
Title: Executive Vice President Title: Vice President
Date: _____3/13/96_____________ Date: _____3/13/96____________
