EXHIBIT 10.14
AMENDMENT
This Amendment (this "Amendment") dated as of February 18, 1999 (the
"Amendment Effective Date") will modify certain terms and conditions of the
below-described Master Purchase Agreement (the "Original Agreement") between
FOCUS Enhancements, Inc., ("Company") and Advanced Electronic Supply Products,
Inc. ("Seller"). Unless specifically noted herein, all other terms of the
Original Agreement shall remain in full force and effect, including any terms
that survive termination of the Original Agreement.
WHEREAS, Company and Seller have heretofore entered into the Original
Agreement, more particularly described as Master Purchase Agreement between
FOCUS Enhancements, Inc, and Advanced Electronics Supply Products, Inc.,
effective as of September 29, 1997;
WHEREAS, Company and Seller desire, upon terms and subject to the
conditions hereinafter set forth, to amend the Original Agreement in certain
respects;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
AMENDMENT OF AGREEMENT
SECTION 1.1 DEFINED TERMS
Except as otherwise specified herein, the terms used in this Amendment and
defined in the Original Agreement as amended hereby (as so amended, the "Amended
Agreement") shall have the meanings provided in the Original Agreement.
SECTION 1.2 AMENDMENT
Effective upon the execution of this Amendment, the provisions of the
Original Agreement referred to below are hereby amended as follows:
1. Section 1 of the Original Agreement is restated in its entirety to
read as follows:
"Seller agrees to manufacture certain items ('Seller Products'),
which are fully described in Exhibit A, attached hereto and
incorporated herein, and any additional cable, connector, AC
adaptors and cable adaptors that is later specified from time to
time in accordance with this Agreement. Such Seller Products shall
include, without limitation, cables, connectors, AC adaptors and
cable adaptors which the Company currently purchases in its
business. Purchaser agrees to purchase all of its requirements for
cables, connectors, AC adaptors and cable adaptors (which form
Seller Products) used in its business from Seller in accordance with
this Agreement. Notwithstanding the foregoing, if (i) Seller does
not or can not provide Company with a Seller Product reasonably
requested by
- 1 -
Company, pursuant to Company Specification as described in Section
9.1 or, if not custom, then a Purchase Order as described in Section
3.3, to be supplied within a period specified in the Specification,
Purchase Order, or, if not specified, then a commercially reasonable
period; (ii) more than three (3%) percent of any one shipment of any
Seller Product is defective or otherwise quality impaired; or (iii)
Company provides at least three bona fide quotes for such Seller
Product obtained from a third-party vendor at arm's length and
Seller does not sell the Seller Product to Company for less than the
average of the three quotes, then Company may at its sole discretion
purchase such Seller Product from another vendor, and the total
purchase amount actually paid to the other vendor shall be fully
deductible from the minimum purchase requirements set forth in
Sections 2 and 3.5. Upon the election by Company purchase from a
third-party vendor, Company shall provide to Seller the reason for
such election, the purchase order amount, the part numbers and the
quantities ordered."
2. Section 2 of the Original Agreement is restated in its entirety to
read as follows:
"This Agreement shall become effective on the date on which it is
executed by both parties and, unless sooner terminated in accordance
with the provisions hereof, shall continue for an initial period of
three (3) years thereafter (the 'Initial Contract Term'). The
Contract Term shall automatically be renewed for a single one (1)
year period following the Initial Contract Tenn, unless sooner
terminated pursuant to Section 16 herein below. The Contract Tenn
shall then be automatically renewed for additional periods of one
(1) year each after the end of the prior term (the "Contract Term"
includes the Initial Contract Term and any renewals thereof) unless
either party provides written notice to the other party of its
intent not to renew the term of this Agreement on or before ninety
(90) days prior to the end of the prior Contract Term. No minimum
purchase amounts, including those set forth in Section 3.5 below,
shall apply to any renewal term following the Initial Contract Term
although there shall be no exclusivity following the first renewal
term."
3. The first sentence of Section 3.5 of the Original Agreement is
restated in its entirety to read as follows:
"During the Initial Contract Tenn, Company shall submit Purchase
Orders, which result in Seller Products that are delivered by Seller
and paid for by Company in accordance with the terms of this
Agreement, the aggregate amount of which shall not be less than Two
Million Five Hundred Thousand Dollars ($2,500,000)."
4. The first sentence of Section 4.1 of the Original Agreement is
amended to be preceded by the phrase:
"Unless reduced pursuant to Section I herein above,"
- 2 -
5. To the end of Section 16, please add the following new Section 16.6:
"Company may elect to terminate this Agreement for cause, forthwith
upon written notice, if (i) Company returns Seller Products pursuant
to Section 1 herein above three or more times during any six month
period; (ii) the orders returned pursuant to (i) above have ordered
quantities of at least five hundred (500) units; and (iii) Company
has complied with all lead time requirements, provided test
procedures, and/or specifications, each only if stated as required
in a written quotation from Seller to Company. Any termination by
Company under this Section 16.6 shall, without limitation, relieve
Company of any and all minimum commitment liabilities hereunder."
SECTION 2
ADDITIONAL PROVISIONS
SECTION 2.1 NO OTHER MODIFICATIONS
Except as expressly modified herein, all of the terms and conditions of
the Original Agreement will remain in full force and effect. The amendments set
forth above (a) do not constitute a waiver or modification of any term,
condition, covenant, agreement, representation or warranty of or set forth in
the Original Agreement or a waiver of a failure to perform any obligation under
the Original Agreement, other than as expressly set forth herein, and (b) shall
not prejudice any rights or remedies which FOCUS or AESP may now or hereafter
have under or in connection with the Original Agreement, as modified hereby. In
the event of any conflict between the provisions of the Original Agreement and
the provisions of this Amendment, the provisions of this Amendment shall
control.
SECTION 2.2 ENTIRE AGREEMENT
The Original Agreement as amended by this Amendment constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous representations, understandings or
agreements, whether oral or written, relating to the subject matter hereof All
prior or contemporaneous representations, understandings or agreements, whether
oral or written, that are not expressly set forth within the four corners of the
Original Agreement as amended by this Amendment are hereby deemed waived,
superseded and abandoned.
SECTION 2.3 AMENDMENTS
No amendment or modification of this Amendment will be binding on any of
the parties to this Amendment unless such amendment or modification is contained
in a written document which expresses an intention to amend this Amendment and
is executed by each of the parties.
SECTION 2.4 COUNTERPARTS
This Amendment may be executed in several counterparts all of which taken
together shall constitute one single agreement between the parties.
- 3 -
SECTION 2.5 TERMS CONFIDENTIAL
The terms and conditions of this Amendment are confidential and shall be
treated as such by FOCUS and AESP except to the extent that either party must
disclose for reasonable business purposes or must otherwise disclose to its
attorneys, accountants, lenders, regulators or others with a need or right to
know.
SECTION 2.6 SUCCESSORS AND ASSIGNS
This Amendment is a continuing obligation and binds, and the benefits
hereof shall inure to, FOCUS and AESP and their respective successors and
assigns. Neither this Amendment nor any rights hereunder may be assigned by
either party without the prior written consent of the other party, which consent
will not be unreasonably withheld, delayed or conditioned.
SECTION 2.7 HEADINGS
Section headings in this Amendment are included herein for convenience or
reference only and shall not constitute a part of this Amendment for any other
purpose
IN WITNESS WHEREOF, the parties have caused the signatures of their duly
authorized officers to be hereunto affixed.
FOCUS AESP
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXX XXXXX
----------------------------------- ---------------------------
(Signature-Authorized Officer) (Signature-Authorized Officer)
Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxx
Title:President & CEO Title: President & CEO
- 4 -
