AGREEMENT FOR SALE OF COMPUTER PRODUCTS
This Agreement is between Merisel FAB, Inc. ("Merisel") and
En Pointe Technologies, Inc.
0000 Xxxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("Reseller")
Merisel is in the business of distributing and selling computer hardware,
software and peripherals ("Products") and providing product-related services to
resellers.
Reseller wishes to purchase Products from Merisel subject to the terms and
conditions of this Agreement.
1. PRODUCT SALES AND PRICING.
1.1. Merisel agrees to sell Reseller Products ordered from Merisel's
then-current inventory list subject to availability and dealer authorization
requirements. Reseller agrees to purchase Products in accordance with this
Agreement and policies and procedures contained in a published Merisel manual or
other writings from Merisel that contain or apply to standard practices and
policies. In the event of a conflict between this Agreement and any Merisel
manual or writing, the terms of this Agreement shall govern. Merisel may
allocate its available Products among its customers in any way that Merisel
deems equitable pursuant to Merisel's standard practice and policy. Reseller
has received a copy of the most current Merisel manual, "How to Do Business with
CLA" dated June 28, 1996.
1.2 Except as otherwise provided in this Section 1, Merisel's prices shall be
the "Inventory Cost" as defined below plus ** % xxxx-up. This xxxx-up may not
be increased during the term of this Agreement.
1.3 "Inventory Cost" is the invoice price charged by Merisel's vendor for the
product plus the inbound freight and insurance fee which shall not exceed 32
basis points (0.32%) during the term of this Agreement. Inventory Cost shall
not be reduced by any money, credits, materials or other assistance provided to
Merisel by its vendors, nor by any prompt payment discounts or credit provided
to Merisel. Merisel may establish its Inventory Cost through any commercially
reasonable accounting method.
1.4 Reseller shall pay the fees for product-related services as stated on
Exhibit A. For any product-related service not listed on Exhibit A, Reseller
shall pay the then-current fee for that service as stated in a published Merisel
manual or writing issued by Merisel that contains or applies to standard
practice and policy.
1.5 Merisel may sell the following Products to Reseller at prices established
by pricing methods determined by Merisel using its standard pricing practice and
policy for that Product (a) Products not on the inventory list or generally
carried in inventory; (b) Products where the
vendor's invoice price to Merisel fluctuates frequently, including memory
chips, boards, and disk drives; or (c) Products that are procured from an
alternate source at Reseller's request. 1.6 All Products will be shipped FOB
destination to Reseller's customers as designated by Reseller.
1.7 Reseller may participate in all Product and Product pricing programs made
available to all of Merisel's customers pursuant to the terms and conditions of
that program.
2. Order Procedures/Payment/Late Payment.
2.1 Reseller must pay for Products in advance by wire transfer, cashier's
check or through a financing company approved by Merisel to finance Reseller's
orders by direct payments to Merisel.
2.2 Reseller must place all Product orders electronically through Merisel's
automated purchasing system and comply with Merisel's then-current standard
published ordering procedures.
2.3 Reseller may use EDI to order Products from Merisel and at Reseller's
election, may use the EDI Value Added Network provider ("VAN"). Each party will
bear its own costs for any modifications that are necessary to that party's
computer systems so that Reseller may use EDI to place orders from Merisel.
Merisel shall pay all VAN and communication charges incurred by Merisel or
Reseller resulting from Reseller's use of EDI to place orders with Merisel.
Reseller understands that if Reseller elects to use EDI to order Products, then
both Reseller and Merisel must take steps to modify their computer systems and
that such modifications will require a reasonable time to complete and the
cooperation of each party.
2.4 For amounts due Merisel not paid in advance by Reseller, Reseller shall
promptly pay by wire transfer, cashier's check or a check drawn on Reseller's
account representing good and available funds. Any amounts due Reseller which
are received or credited by or from third parties or Merisel may be applied
against any amounts due Merisel from Reseller.
2.5 On payments not received from Reseller within 30 days of the due date,
Reseller shall pay finance charges assessed by Merisel which will not exceed the
legally permitted rate. Merisel may suspend all sales, assistance or services to
Reseller if Reseller fails to promptly pay any amount due Merisel. Reseller
shall pay Merisel's costs and expenses including reasonable attorneys' fees
related to the collection of monies owed to Merisel under this Agreement.
3. QUARTERLY VOLUME PURCHASE COMMITMENT.
3.1 For each quarter under this Agreement, Reseller shall purchase a volume
of Products (net of returns) from Merisel at least equal to the Volume Purchase
Commitment for that quarter as listed in the chart below.
Quarter Volume Purchase Commitment
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October 1, 1996 - December 31, 1996 $3.5 million
January 1, 1997 - March 31, 1997 $6.5 million
April 1, 1997 - June 30, 1997 $8 million
July 1, 1997 - September 30, 1997 $10 million
October 1, 1997 - December 31, 1997 $12 million
January 1, 1998 - March 31, 1998 $15 million
Any purchases made by Reseller from Merisel in July, August, or September
1996, shall be included in Reseller's purchases under the first quarter.
3.2 If in each six month period under this Agreement, Reseller fails to
purchase a volume of Products from Merisel at least equal to the Volume Purchase
Commitment for the two quarters in that six month period, then funds for the
benefit of Merisel shall be segregated as described under Section 3(c) of the
Escrow Agreement between Reseller, Merisel and CITIBANK N.A. attached as
Exhibit A.
3.3 Merisel may in its discretion, at the request of Reseller, reduce the
xxxx-up for certain of Reseller's bids, contracts, or customers ("Bid Desk
Pricing"). For purposes of determining if Reseller has met its Volume Purchase
Commitment under Section 3.1 for any quarter or purchased $55 million in
Products under Section 4, only $8.25 million of Products purchased at Bid Desk
Pricing may be included during the term of this Agreement.
4. TERM AND TERMINATION. This Agreement is effective as of the date it is
executed by both parties (the "Effective Date"). The Agreement will expire upon
the earlier of 18 months from the Effective Date or the date Reseller purchases
$55 million in Products from Reseller (net of returns). All purchases by
Reseller from Merisel after expiration of this Agreement shall be according to
the terms and conditions of this Agreement unless otherwise agreed to by both
parties in writing. However, Section 3 terminates with the expiration of the
original term of this Agreement.
5. DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITY. FOR ANY PRODUCTS
SOLD TO RESELLER UNDER THIS AGREEMENT, MERISEL EXPRESSLY DISCLAIMS ANY AND ALL
EXPRESS OR IMPLIED WARRANTIES INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL MERISEL BE LIABLE TO
RESELLER FOR ANY INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND.
6. OPTIONAL SERVICES. Merisel may provide Reseller and Reseller may
participate in additional programs, services or assistance pursuant to the
terms for that program, service or assistance. If the program, service or
assistance is provided by a party other than Merisel, Merisel shall not be
liable to Reseller for any claims, demands, damages or liabilities of
Reseller arising from that third party's acts or omissions.
7. COMPAQ STAR ALLOCATION. Reseller shall within 90 days of the Effective
Date move its Compaq Star Allocation to Merisel except for the seven current
Reseller customer contracts as designated by Reseller within 90 days of the
Effective Date.
8. PROHIBITION ON USE OF MERISEL'S NAMES AND MARKS. Reseller shall not
use any name, trademark, service xxxx, logo or slogan now or hereafter owned
by Merisel or its affiliated companies.
9. ARBITRATION. Any dispute, claim, or controversy (except trademark),
on demand of either party, must be submitted to binding arbitration before
the American Arbitration Association in San Francisco and under the then
existing AAA commercial rules.
10. ASSIGNMENT. Merisel may assign this Agreement without Reseller's
consent to a party capable of performing Merisel's obligations under this
Agreement.
11. MISCELLANEOUS.
11.1 Notwithstanding any other provision of this Agreement, Merisel and
Reseller agree that in the event of an alleged or actual breach, default, or
claim based on or arising out of this Agreement, the exclusive remedy available
to Merisel shall be as provided in Section 3 of the Escrow Agreement between
Merisel, Reseller and CITIBANK N.A., which Escrow Agreement is given as security
for the purchase obligation imposed by this Agreement, and which Escrow
Agreement is attached to and incorporated in this Agreement as Exhibit A.
11.2 Reseller or Merisel each represent that neither the entry into nor the
performance of this Agreement by that party violates that party's obligations
to any third party.
11.3 Any notice given under this Agreement shall be sent by courier,
overnight mail by a nationally recognized company, or United States certified
mail, return receipt requested, postage prepaid. Notices to Merisel shall be
sent to ComputerLand Headquarters, 0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx, P. O. Xxx
0000, Xxxxxxxxxx, Xxxxxxxxxx, 00000-0000, Attention: Vice President/Sales
and Franchise Operations, or to a different address designated by Merisel.
Notices to Reseller shall be sent to the address on the first page of this
Agreement or to a different address designated by Reseller. Notice or demand
shall be deemed effective when received.
11.4 This Agreement contains the entire agreement between the parties and
supersedes any agreement between Merisel and the Reseller concerning the
subject matter hereof. There are no representations, agreements, terms or
conditions other than those contained or referred to in this Agreement. The
Agreement cannot be modified except by an agreement in writing signed by both
parties.
11.5 This Agreement shall bind the parties and their successors and assigns.
11.6 Merisel and Reseller are independent businesses. There is no agent,
partnership, franchise or joint venture relationship between them by virtue
of this Agreement or by any course of dealing between them.
11.7 Both parties agree both during and after this term of this Agreement
to maintain the confidentiality of this Agreement and all confidential or
proprietary information concerning the other party including its methods of
doing business, programs, business systems, procedures, pricing, business
plans, vendor arrangements, price lists, and manuals. However, each party
may disclose to any vendor information regarding the purchases by Reseller of
that vendor's Products.
11.8 The interpretation and performance of this Agreement shall be governed by
the laws of the State of California. Venue shall be in the federal or state
courts located in Alameda or San Francisco Counties, California. The parties
submit to jurisdiction of the State of California.
11.9 In the event of any litigation or arbitration arising out of or
relating to this Agreement, the prevailing party shall be entitled to receive
from the nonprevailing party payment of all costs, attorneys' fees, expert
witness fees and related expenses incurred in such litigation or arbitration.
EN POINTE TECHNOLOGIES, INC. MERISEL FAB, INC.
By:______________________________ By:______________________________
Name:____________________________ Name: Xxxxxxx Xxxxx
Title:_____________________________ Title: President
Dated:____________________________ Dated: August 22, 1996
** Confidential portions omitted and filed separately with the Commission.
EXHIBIT A
SERVICES FEE
Outbound Freight No charge for outbound freight using
standard 2-day freight method;
payment of actual outbound freight
charges for any upgrade from the
standard 2-day freight method.
Configuration Level Charge Per Merisel's then-current price grid
for configuration.
Restock Fee/Factory Sealed Return 5%
(Note 1)
Restock Fee/Open Box Return (Note 2) Per Merisel's then-current restock fee
matrix for open box returns.
Ship Complete and Configuration Day 0-15 is free; Day 16 forward is
0.00045 per day on purchase price of
allocated inventory.
Configuration Returns (Note 2) Return fee is the same as the restock
fee for open box returns. Configuration
returns must be received by Merisel
within 30 days of the invoice date.
Alternate Distribution Center Fee Fee waived.
(Note 3); Direct Ship Fee; Sign-Up and
Renewal Fees; On-Line Express Fee;
MeriSource Fee; eMail Access Fee;
Order Cancellation Fee; Non-electronic
Order Fee; Minimum Ship Fee
Note 1: Within 45 days of each quarter's end under this Agreement, Merisel
shall rebate Reseller restock fees paid by Reseller in that quarter for factory
sealed returns so that Reseller does not pay a restock fee for factory sealed
returns until the volume of factory sealed returns in a quarter exceeds 3.75% of
the volume of Reseller's purchases (net of returns) in that quarter.
Note 2: Within 45 days of each quarter's end under this Agreement, Merisel
shall rebate Reseller restock fees for open box returns and configuration return
fees paid in that quarter in an amount equal to:
[2.5% multiplied by the restock fee paid by Reseller for open box returns and
configurations return fee for configuration returns in that quarter] minus [the
number of RMA's issued to Reseller in the quarter multiplied by $30.00].
Note 3: Within 45 days of each quarter's end under this Agreement, Merisel
shall rebate Reseller any Alternate Distribution Center fees paid by Reseller in
that quarter for freight using the standard freight method.
