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
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.
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 1 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 3-month 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.
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission
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.
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission
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,
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confidential and exclusive property of Seller, other than any artwork provided
by Purchaser to be incorporated into the 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
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is confidential. To the extent that such confidential information
("Information") is disclosed in furtherance of this Agreement or any purchase
order issued hereunder, such 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.
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission
17. SELLER'S AGREEMENT *
a. Provided Purchaser meets the minimum purchase requirements
of this Agreement, Seller agrees that it will not * as Seller and Purchaser
agree to in writing *.
b. Seller retains the right to * .
c. Seller retains the right without restriction to * .
18. PURCHASER'S AGREEMENT * . Purchaser agrees that
during the term of this Agreement and for * years after this Agreement is
terminated for any reason, Purchaser shall not, directly or indirectly, (a) *
, or (b) * of Seller. If the Seller 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, and if Purchaser is thereby entitled to and does
terminate this Agreement as a result of Seller's default, Purchaser shall no
longer be bound by the provisions of this SECTION 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-
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission
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.
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
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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 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 X. Xxxxx
----------------------------------
Its General Manager
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SCHEDULE 1
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 * * * *
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission
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 * 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
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* Subject to confidential treatment request; filed separately with the
Securities and Exchange Commission