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Exhibit 10.14
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
DISTRIBUTOR AGREEMENT
This Distributor Agreement (the "Agreement") is made by and between Dragon
Systems, Inc., a ___________ corporation ("Supplier") and Merisel Americas,
Inc., a Delaware corporation ("Distributor"). Supplier and Distributor hereby
agree as follows:
1. Distribution Rights. Supplier grants to Distributor the
non-exclusive right and license to distribute Supplier's Products to
Distributor's customers in the U.S. and Canada; provided, that Distributor may
at any time during the term of this Agreement assign its rights and obligations
under this Agreement to one or more of Merisel, Inc., or any of Merisel, Inc.'s
majority owned direct or indirect subsidiaries or affiliates (individually, a
"Subsidiary") with respect to the U.S. and Canada, and each Subsidiary shall
thereafter have the rights and obligations of Distributor hereunder with respect
to the territory assigned to it as if such Subsidiary had entered into this
Agreement directly with Supplier. "Products" shall include all of Supplier's
products set forth on Exhibit A hereto and any other products manufactured or
marketed by Supplier for distribution, during the term of this Agreement and
intended for sale by resellers. Supplier has provided Distributor a list of all
other distributors purchasing Products from Supplier as of the date hereof, and
Supplier shall give Distributor reasonable prior written notice of the
appointment of any other distributor of any of its Products during the term of
this Agreement.
2. Price and Payment Terms.
2.1 Retail Price and Discount. The purchase price payable for any
Product ordered by Distributor shall be equal to Supplier's published suggested
retail price for the Product less a discount of _________ %. Suggested retail
prices, Distributor and Reseller discount amounts and purchase prices for the
Products are set forth on Exhibit A. In the event Supplier wishes to change the
suggested retail price of any Product, Supplier shall give Distributor at least
thirty (30) days' prior written notice of the change, specifying the new
suggested retail price, discount amount (determined using the above discount
percentage) and purchase price payable by Distributor. In the event any new
Product is manufactured or marketed by Supplier for distribution during the term
of the Agreement, Supplier shall notify Distributor in writing of the suggested
retail price, discount amount (determined using the above discount percentage)
and purchase price payable by Distributor.
2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.2 Price Protection.
(a) If the purchase price of any Product is increased, Supplier
shall honor any Distributor purchase orders placed prior to the effective date
of the increase at the price in effect immediately prior to the time the
increase is announced.
(b) If the purchase price of any Product is decreased, Supplier
shall grant Distributor a credit in the amount of the price decrease for each
unit of the Product that is or has been (i) on order or in transit to
Distributor on the effective date of the price decrease, (ii) in Distributor's
inventory on the effective date of the decrease, and (iii) in Distributor's
customers inventory on the effective date of the decrease. In order to receive
any credits hereunder, Distributor shall provide Supplier with a report or
reports specifying the number of units for which credits are requested, and
Supplier shall grant such credits within thirty (30) days after receipt of any
such report. In the event no amounts are due to Supplier at such time,
Distributor shall mutually agree upon a method of payment for such credit
amount, which may include but shall not be limited to cash payment, in
accordance with Section 2.7 of this Agreement. Should Supplier have reasonable,
valid cause to question or contest any credit requested under this Section 2.2,
Supplier shall contest such amount or pose such question within thirty (30) days
following Supplier's receipt of Distributor's report(s) as described hereinabove
or Supplier shall waive its rights to contest or question such credits and shall
remit such credit amounts to Distributor as described in this Section 2.2.
(c) Section 2.2(b) shall apply to all Subsidiaries that have the
rights of Distributor hereunder, provided that for such Subsidiaries (and also
for Merisel Americas, Inc. to the extent Product is held in inventory in North
America outside of the United States or ordered from a location in North America
outside of the United States) the applicable credit shall be indexed to the
local currency rate in effect on the date of the price decrease, for the
territory or country in which such inventory of affected Product(s) is located.
In no event shall the credit granted for such price decrease under this section
exceed the aggregate purchase price paid in U.S. dollars for the products which
are subject to the price decrease.
2.3 Payment Terms. Payments to Supplier with respect to all Products
received by Distributor shall be due and payable within sixty (60) days after
Distributor's receipt of the Products set forth on Exhibit A hereto; except for
Distributor's Initial Stocking Order ("ISO"), which shall be due and payable
within ninety (90) days after Distributor's receipt of the Products set forth on
the ISO. All payments shall be subject to (i) [**] of the date of receipt of
Products and (ii) a [**] if payment is made prior to the receipt of the order.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.4 Rebates. Set forth on Exhibit A are Quarterly Sales Goals agreed
upon by Distributor and Supplier for the first four fiscal quarters of
Distributor during the term of this Agreement (with a prorated goal being
included in the event this Agreement commences on a date other than the start of
a fiscal quarter of Distributor). In the event Distributor achieves the
Quarterly Sales Goal in any quarter (as they may be adjusted from time to time
pursuant to Exhibit A), Supplier shall pay Distributor a rebate in the amount
determined pursuant to Exhibit A within thirty (30) days after receipt of a
sales report from Distributor setting forth its sales results. For quarters
after the first four quarters, Supplier and Distributor shall agree on mutually
acceptable Quarterly Sales Goals as provided in Exhibit A.
2.5 [**]. Supplier agrees that [**] shall not at any time [**] and
other terms and conditions of sale for the Products [**].
2.6 Recoupment.
(a) Distributor shall have the right of recoupment with respect to
all amounts owed to it by Supplier under this Agreement. Any amounts payable to
Distributor under this Agreement for any reason (including, without limitation,
for price protection, product returns, or marketing funds) shall first be
applied as a credit by Distributor and shall reduce any uncontested amounts owed
by Distributor to Supplier. In the event that Distributor maintains a credit
balance with Supplier after application of credits, Supplier shall, upon
Distributor's request, promptly pay Distributor the amount of the remaining
credit balance via an instrument acceptable to Distributor (which may include,
but shall not be limited to, in Distributor's sole option, by cash, company
check, cashier's check, or wire transfer).
(b) Distributor shall have the right of recoupment with respect to
any amounts owed by it to Supplier. Any amounts owed to Supplier by Distributor
under this Agreement for any reason (including, without limitation, for the
purchase of products) shall first be reduced by any amounts owed to Distributor
by Supplier. In the event that Distributor maintains a debit balance with
Supplier after such reduction (including the application of credits),
Distributor shall have the right, in its sole option, to either: (i) return
Products in Distributor's inventory to Supplier for credit in the amount of the
purchase price paid for such Products, less any credits previously issued to
Distributor under Section 2.2 hereof, which credit shall be applied to the
amounts owed by Distributor to Supplier; or (ii) pay Supplier the amount owed by
Distributor to Supplier. Irrespective of which option Distributor selects,
Distributor shall retain all future rights to return Product as set forth in
this Agreement.
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3. Orders and Shipping.
3.1 Order Placement. Distributor shall place orders for Products
with Supplier in writing. Supplier shall use reasonable efforts to deliver
Products to Distributor within five (5) days of the delivery date set forth in
Distributor's order, or, if no delivery date is specified on Distributor's
order, within ten (10) days of Supplier's receipt of Distributor's order.
Distributor shall have no obligation to order any minimum quantity of Products.
3.2 Allocation. In the event of any shortage of Products, upon order
by Distributor Supplier shall ship to Distributor at least as many units of
Product as Supplier ships to any other similar customer. In the event any
Product is subject to limited availability at any time and Distributor has
placed orders for such Product, either prior to the date such Product becomes
subject to limited availability, or during such time as such Product is subject
to limited availability, Supplier agrees to contact Distributor prior to
shipping any order for such Product, and Distributor shall have the right, in
its sole option and without liability, to cancel any existing order for such
Product(s).
3.3 Title and Risk of Loss. Products shall be shipped F.O.B. to the
Distributor warehouse specified in the order. Any freight costs for Products
shipped to Distributor shall be paid by Supplier.
3.4 Incorrect or Erroneous Shipment. In the event the Product(s)
shipped to Distributor does not conform to the Product description for such
Product set forth on the applicable purchase order for such Product(s),
Distributor shall contact Supplier, and Supplier shall ship the correct
Product(s) to Distributor within two (2) business days of Distributor's
notification of such misshipment to Supplier at no additional cost to
Distributor. Distributor shall obtain a Return Material Authorization number, as
is set forth in Section 5.4 of this Agreement, for any such Product and shall
return any misshipped Product to Supplier, via freight collect, for credit in
the amount paid by Distributor for such Product.
3.5 Disclaimer of Standard Terms. All terms, conditions, or
provisions which may appear as pre-printed language or otherwise be inserted
within any order, order confirmation or invoice for any Products shall be of no
force and effect notwithstanding the execution or delivery of such other
document subsequent to the date of this Agreement.
3.6 Bar Coding. Supplier shall xxxx each Product sold to Distributor
with the appropriate UPC bar code: The preferred bar codes are Version A
barcode, or Code 39 with FACT Data Identifiers barcode. In the event Supplier
utilizes any other UPC standard bar code, Supplier shall submit a sample of such
bar code to Distributor, prior to the execution of this Agreement, to verify
compatibility with Distributor's bar
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
code recognition systems. Distributor reserves the right, in its sole discretion
and without penalty or liability to Distributor, to (i) refuse any shipment of
Product(s) which are not so marked; and (ii) elect not to set up any Product in
its systems which is not marked with a UPC standard bar code compatible with
Distributor's bar code recognition systems.
4. Defective Products. Supplier shall accept the return of any Product
alleged by Distributor or its customers to be defective and shall grant to
Distributor a credit for any Products to be returned in the amount of the
purchase price charged to Distributor therefor, less any applicable credits
pursuant to Section 2.2 hereof which have been previously paid to Distributor.
Supplier agrees to issue Distributor a blanket Return Authorization for all
Products which are returned to Distributor, by its customers, as defective.
Supplier also shall pay all freight charges for shipments of such Products to
Supplier by Distributor.
5. Inventory Maintenance.
5.1 Stock Balancing Rights. At any time or from time to time after
the date of execution of this Agreement, Distributor may stock balance Products
which are in their original packaging to Supplier [**].
5.2 Acceptable Level Return Rights. In addition to the Stock
Balancing Rights set forth hereinabove, in the event [**] at any time during the
term of this Agreement, Distributor may [**].
5.3 Discontinued Products.
(a) In the event Supplier shall discontinue any Product or declare
any Product to be obsolete, Supplier shall notify Distributor thirty (30) days
in advance of such discontinuation or declaration of obsolescence. Distributor
shall have the right to return all units of such Product then in Distributor's
Inventory to Supplier, for credit for a period of [**] days following the
effective date of discontinuation.
(b) In the event Supplier offers to Distributor, or any other
similar purchaser, new Products which are of equivalent and/or superior fit,
form and function to a similar Product, and such new Product negatively affects
Distributor's ability to sell such similar Product(s) then in Distributor's
inventory, Distributor shall have the right to declare its inventory of such
similar Product(s) functionally discontinued, shall so
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
notify Supplier, and shall return the affected inventory of such functionally
discontinued Product(s) for credit for a period of [**] days following the date
of functional discontinuation.
(c) The return rights set forth in this Section 5.3 are in addition
to any return rights described under Sections 5.1 and 5.2 of this Agreement.
5.4 Return Procedures. Supplier agrees to issue Distributor a
blanket Return Authorization for all Products which are returned to Supplier by
Distributor; or, at Distributor's sole option, Supplier shall issue a Return
Material Authorization ("RMA") number for any Products Distributor requests to
return within [**] business days following the date Distributor requests such
RMA; (provided, however, that in the event such RMA is not issued within such
[**] day period, Distributor shall have the right to return any units of the
Product(s) to Supplier without an RMA, and Supplier shall be obligated to accept
such return). All Products returned pursuant to this Section 5 shall be unopened
and in their original packaging. The amount of the credit for any returned
Products shall be equal to the original purchase price charged to Distributor
less any credits pursuant to Section 2.2 hereof which have been previously paid
to Distributor. Distributor shall bear all freight costs associated with returns
of Product to Supplier by Distributor under Section 5.1 and 5.2. Supplier shall
bear all freight costs associated with returns of Product to Supplier by
Distributor under Section 5.3.
6. Product Information Obligations and D.A.T.A. Bank Program.
6.1 Product Set Up, Descriptions and Technical Support Requirements.
Supplier shall provide Distributor's Product Information Center with the
materials set forth on Exhibit B hereto. Distributor may, from time to time,
change the requirements set forth in Exhibit B, and Supplier in its discretion
may continue to provide such new materials. Supplier shall be solely responsible
for the factual accuracy and completeness of any information or materials
provided to Distributor. Distributor reserves the right to delay set up in
Distributor's systems of any Product for which this information is not provided.
6.2 Product Physical Information. Supplier agrees to provide
Distributor with the per-unit weight of each Product (such weight to include
packaging) to be distributed by Distributor, and the cube dimension of each unit
of Product, each Master Carton (if any) for each Product, and each pallet.
Distributor reserves the right to delay set up in Distributor's systems of any
Product for which this information is not provided.
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6.3 New Products. Supplier agrees to provide Distributor with the
material described in Section 6.1 and Exhibit B hereof for all updates and
revisions of each Product and for each new Product made available for
distribution by Supplier during the term of this Agreement, and shall provide
Distributor with thirty (30) days prior notice or at least as much notice given
to any other similar purchaser of any such update, revision or new Product.
6.4 Product Changes. Supplier shall give Distributor thirty (30)
days notice, or at least as much notice as is given to any other similar
purchaser for any changes in Product packaging, documentation or major version
changes.
6.5 Information, Products and Services.
(a) Distributor, from time to time, may design, develop and operate
a variety of materials, product catalogues, product set up forms, sales support
and marketing services in connection with its wholesale computer products
distribution business, including, without limitation, maintaining an electronic
library containing computer hardware, software, peripheral and accessory product
descriptions, creating custom product descriptions upon the request of its
customers, publishing a computer reseller price book, creating and publishing
advertisements for computer products; operating direct mail promotions,
publishing catalogues; operating sales events and promotions and training
sessions; operating an on-line order entry and information service
(collectively, the "Information Products"). Distributor's Information Products
may also permit Supplier to communicate directly with resellers through on-line
message boards and other technology.
(b) From time to time Supplier may provide information to
Distributor for inclusion in the Information Products. Distributor may, in its
sole discretion, with prior written approval from Supplier, charge a fee to the
Supplier as a condition precedent for the inclusion of Supplier's information in
an Information Product.
(c) Distributor, in its sole discretion, may publish the Information
Products through any available medium, including, without, limitation, through
on-line computer networks, print media, CD ROM, diskette, facsimile, cable or
satellite transmission. The type, amount and usage of the Information Products
shall be as determined by Distributor from time to time, in its sole discretion.
Distributor, in its sole discretion, may elect to charge the recipient of the
Information Products (the "Customer") for receipt of the Information Products
and the pricing charged by Distributor may include a profit for Distributor.
Distributor reserves the right to modify or terminate any Information Product at
any time, without notice or liability to Supplier, unless Supplier has paid for
inclusion in which case Distributor will notify Supplier and provide a refund
for service paid for but not provided.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(d) The information that is contained in the Information Products
come from the following sources:
(i) Distributor created or generated information, including
materials created by Distributor, that may or may not embody product information
provided by the Supplier; and
(ii) Supplier provided "Spec Sheets", photographs and Supplier
trademarks, tradenames and logos (collectively, the "Supplier Information").
"Distributor Information" means all intellectual property and information that
is contained in the Information Products, except the Supplier Information.
(e) Distributor shall have the ownership rights for all Distributor
Information. Supplier grants Distributor a nonexclusive worldwide right and
license to republish and distribute the Supplier Information and to include the
Supplier Information in any Information Product that Distributor may produce
from time to time. Supplier warrants to Distributor that it has all rights to
grant such a license in the Supplier Information.
(f) Supplier shall be solely responsible for the factual accuracy
and completeness of any information provided to Distributor for use in any
Information Product.
6.6 D.A.T.A. Bank Program. At Supplier's sole discretion, Supplier
may participate in Distributor's D.A.T.A. Bank Program, in such countries where
Distributor offers such a Program, a copy of which is attached to this Agreement
as Exhibit C and which may subsequently be amended or discontinued by
Distributor from time to time. Supplier's participation in the D.A.T.A. Bank
Program during each subsequent year shall be automatically renewed unless
Supplier gives written notice to Distributor, in accordance with the terms set
forth in Exhibit C, at least thirty (30) days prior to the expiration of the
first or any subsequent Program year during the term of this Agreement.
Distributor shall render an invoice each calendar quarter to Supplier for the
participation fees payable by Supplier in connection with the D.A.T.A. Bank
Program during the preceding quarter. Invoices rendered hereunder shall be paid
by Supplier within thirty (30) days after receipt or, at Distributor's option,
Distributor may deduct such amounts from any amounts due Supplier hereunder.
7. Marketing, and Shelf Space Acquisition Fee.
7.1 Programs and Development Funds. Supplier shall provide
Distributor with marketing development funds equal to [**] of Distributor's
gross
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
purchases of Products. Such funds shall be used in connection with marketing
programs to be mutually agreed upon by Supplier and Distributor. Supplier shall
also provide Distributor with Product launch funds of at least [**] to be
utilized by Distributor to conduct initial marketing activities in connection
with the commencement of Distributor's relationship with Supplier, such funds to
be expended in accordance with a launch plan to be mutually agreed upon by
Supplier and Distributor. Distributor shall invoice Supplier for all marketing
development and launch funds due Distributor hereunder, and such invoices shall
be due and payable within [**] days after receipt or, at Distributor's option,
Distributor may deduct such amounts from amounts due Supplier.
7.2 Shelf-Space Acquisition Fees. To defray the costs incurred by
Distributor associated with the initial warehousing start-up expenses of the
Product(s), Supplier shall provide Distributor with a nonrecurring Shelf-Space
Acquisition Fee in the amount of [**]. Supplier agrees to remit, to Distributor
prior to the set up of any Supplier Product in Distributor's systems, the
Shelf-Space Acquisition Fee via an instrument acceptable to Distributor (which
may include, but shall not be limited to, in Distributor's sole option, by cash,
company check, cashier's check, or wire transfer).
7.3 News Releases. No news releases, including photographs, films or
videos, public announcements, Product or company endorsements by Distributor or
confirmation of all, or any part of, the subject matter of this Agreement shall
be made public without the prior written consent of Distributor.
8. Product Agreements and Indemnification.
8.1 No Violations. Supplier represents and warrants that the
purchase of Products by Distributor and subsequent sale to its customers, as
contemplated by this Agreement throughout the United States, Canada and Mexico,
and, to the best knowledge of Supplier, the sale of each Product in any other
foreign country, violates no foreign, federal state or local law or regulation
or any agreement between Supplier and any other person or entity.
8.2 Title and Infringement. Supplier represents and warrants that
(a) it owns all rights, title and interest in and to the Products necessary to
enter into and perform its obligations to Distributor hereunder, and (b) not
withstanding a current lawsuit against Supplier, to the best of Supplier's
knowledge, no Product sold to Distributor during the term of this Agreement, nor
the use of any such Product, nor anything in or contemplated by this Agreement,
infringes upon the Intellectual Rights (as herein defined) of any other person
or entity, and no suit or proceeding is pending or threatened alleging that any
Product or the use thereof infringes upon any Intellectual
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Rights. As used herein, the term "Intellectual Right" means any rights relating
to any trademark, tradename, service xxxx, copyright, patent, trade secret or
other proprietary right.
8.3 Indemnification. Supplier agrees to hold Distributor harmless
and indemnify, reimburse, and defend it upon request at its own cost from any
proceedings related to any claim asserted against Distributor or its customers
with respect to the Products, any information or materials provided by Supplier
pursuant to this Agreement, or which otherwise arises out of its relationship
with Distributor, (including without limitation any claim that any Product
infringes the Intellectual Rights of another) and shall pay them for all amounts
owed by them to third persons and expenses incurred by them in connection with
any such claim or suit. Notwithstanding the above, Supplier shall not be
responsible for indemnifying Distributor for claims resulting from (a) express
warranties by Distributor in excess of those provided by Supplier; (b) gross
negligence of Distributor; or (c) intentional misconduct by Distributor.
8.4 Insurance. Supplier shall maintain, at its expense, a policy or
policies of product liability insurance, with a broad form Vendor's Endorsement
naming Distributor as an additional insured, providing coverage of not less than
[**] combined single limit, and shall provide Distributor with a Certificate of
Insurance (including broad form Vendor's Endorsement) reflecting such coverage.
The Certificate shall provide for at least ten (10) days prior written notice of
cancellation or substantial change.
8.5 Buy American Act. In order to ascertain whether or not the
Products meet the requirements of the "Buy American Act" and to ensure that the
Products may be exported to Canada and Mexico in accordance with the terms of
the North American Free Trade Agreement, Supplier shall set forth, on Exhibit A
hereto, which Products, if any, are less than fifty-one percent (51 %) U.S.
manufactured, and further shall complete the information set forth on Exhibit D
hereto, the "Certificate of Origin" with respect to each Product made available
to Distributor under this Agreement, such form to be completed on or prior to
the date such Product is first made available for purchase hereunder. Further, a
new copy of such form shall be provided to Distributor each year during the term
of this Agreement, prior to the annual anniversary date of such Agreement.
Supplier shall indemnify Distributor, hold it harmless and reimburse it for any
and all expenses or costs incurred by Distributor in the event the information
set forth by Supplier on the "Certificate of Origin" is incorrect or erroneous.
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9. Term and Termination.
9.1 Unless earlier terminated as provided herein, this Agreement
shall have an initial term of one years from the last date either party executed
this Agreement, and shall automatically renew for successive one year periods
unless either party notifies the other party in writing of its election to
terminate the Agreement at least sixty (60) days prior to the expiration of the
initial term or any renewal term, as applicable.
9.2 Either party may terminate this Agreement with or without cause,
upon thirty (30) days prior written notice to the other party; provided that, in
the event the terminating party notifies the other party that such other party
has materially breached any provision of this Agreement, the party in breach
shall have thirty (30) days after written notification detailing the breach is
delivered by the non-breaching party to cure such breach. If such breach is not
cured within this thirty (30) day period, the non-breaching party shall confirm
its intention to terminate the Agreement in writing within five (5) business
days, such termination to be effective immediately upon receipt, by the party in
breach, of such written response.
9.3 Upon expiration of this Agreement or termination by either
party, Distributor may return to Supplier for credit any Products in its
inventory or returned to it by its customers within the succeeding one hundred
eighty (180) days under its stock balancing program. Distributor shall be
credited for any Products so returned in an amount equal to the original
purchase price thereof, less any credits pursuant to Section 2.2 hereof which
have been previously paid to Distributor and shall be first applied to any
uncontested amounts due Supplier. Any remaining balance shall be promptly paid
to Distributor. Supplier shall bear all freight costs associated with returns of
Product to Supplier by Distributor under this Section 9 if Supplier is
terminating without cause or Distributor is terminating due to Supplier's
material breach. Distributor will bear all freight costs associated with returns
of Product to Supplier by Distributor under this Section 9 if Distributor is
terminating without cause or Supplier is terminating due to Distributor's
material breach.
10. General.
10.1 Entire Agreement. This Agreement contains all the agreements,
understanding, representations, conditions, warranties and covenants, and
constitutes the sole and entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes all prior communications or
agreements, written or oral. This Agreement may not be released or modified
except by the mutual written consent of both Distributor and Supplier as
attested to by an instrument signed by an officer of each of them. If any
provision of this Agreement is declared invalid or unenforceable the remaining
provisions of this Agreement shall remain in full force and effect.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
10.2 Independent Relationship. Nothing contained herein shall be
deemed or construed as creating a joint venture or partnership between
Distributor and Supplier. Neither Distributor nor Supplier is by virtue of this
Agreement authorized as an agent or other representative of the other.
10.3 Assignment. Except as expressly provided herein, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party; provided, that Distributor
may assign its rights and obligations hereunder to one or more subsidiary or
affiliate corporations without consent, but Distributor shall remain liable for
all obligations hereunder. In the event either party denies consent to
assignment of this Agreement, the other party shall have the right to terminate
under Section 9.2.
10.4 Waiver or Delay. Any waiver of any provision of this Agreement,
or a delay by either party in the enforcement of any right hereunder, shall
neither be construed as a continuing waiver, or create an expectation of
non-enforcement, of that or any other provision of this Agreement, either in the
present or in the future.
10.5 Governing Law and Jurisdiction. The validity, interpretation,
and performance of this Agreement shall be controlled by and construed under the
laws of the of the state of the non-filing parties. Venue shall lie in the
county and state of the non-filing party.
10.6 Force Majeure. Neither party hereto shall be liable for the
failure to perform any of its obligations under this Agreement if such failure
is caused by the occurrence of any force majeure beyond the reasonable control
of such party, including without limitation fire, flood, strikes and other
industrial disturbances, failure of transport, accidents, wars, riots,
insurrections or acts of God.
10.7 Confidentiality. Distributor and Supplier shall hold in trust
and confidence and shall not disclose for a period of [**] from the date of
disclosure any information deemed "Confidential Information" by the disclosing
party and identified as such at the time of disclosure. Information shall not be
deemed "Confidential Information" for the purposes of this Agreement that (i) is
already known to the non-disclosing party at the time of disclosure; (ii) is or
becomes publicly known through no wrongful act of the non-disclosing party,
including by public announcement by the disclosing party; (iii) is received from
a third party without similar restrictions and without breach of this Agreement;
(iv) is independently developed by the non-disclosing party; or (v) is lawfully
required to be disclosed by any governmental agency or otherwise required to be
disclosed by law.
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10.8 Headings. The headings appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or extent of such section or in any way affect such
paragraph.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single instrument
and agreement.
10.10 Notices. Any notices under this Agreement shall be in writing
addressed to both the President and Contract Administrator of such party at the
address set forth below (or such other address as a party may notify the other
party in accordance with these provisions), and shall be delivered by certified
mail, return receipt requested or by an overnight delivery service of national
standing.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth below.
MERISEL AMERICAS, INC. DRAGON SYSTEMS, INC.
000 Xxxxxxxxxxx Xxxx. Address: 000 Xxxxxx Xx.
X.X. Xxx 000 Xxxxxx, XX 00000
Xx Xxxxxxx, XX 00000-0000
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------- --------------------------
Name: XXXXX XXXXXXXX Name: Xxxxx X. Xxxxx
Title: VICE PRESIDENT Title: President
PRODUCT & INVENTORY
MANAGEMENT
Date: 1/7/98 Date: 29 Dec 1997
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EXHIBIT A
PRODUCTS
SUGGESTED DISTRIBUTOR RESELLER % U.S.
PRODUCT LIST PRICE DISCOUNT DISCOUNT MFCTD.
--------------------------------------------------------------------------------
REBATE
QUARTERLY SALES GOAL REBATE PERCENTAGE
During all subsequent years of the Agreement, the Quarterly Sales Goals and
Rebate Percentage for the year shall be as mutually agreed to by the parties
hereto and shall be based upon Distributor's sales of the Products during the
prior year. Any Quarterly Sales Goals shall, at Distributor's option, be amended
following the end of any calendar quarter, if both parties mutually agree to
such amendments.
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EXHIBIT B
PRODUCT INFORMATION CENTER AND TECHNICAL SUPPORT REQUIREMENTS
1. A new Product Set Up Form must be fully completed for each Product,
update, version change or new Product introduced by Supplier, which
Supplier wishes Merisel to distribute. The Product Set Up Form shall be
provided to Supplier by the Product Information Center.
2. Spec Sheets, Original Data Sheets and additional Supplier-provided
reference materials must be completely legible. Materials which are not
completely legible will be returned to Supplier and will not be used.
3. For each Product distributed by Distributor, Supplier is required to
provide the following:
3.1 Spec and Data Sheets.
3.1.1 Three (3) original Spec or Data Sheets for the Product and any
product information which is available on CD-ROM.
3.1.2 If Supplier is new to Distributor, Supplier must send fifteen
(15) Product family, or company product offering, brochures to
each of the persons listed below:
Director Director
Inside Sales, West Coast Inside Sales, East Coast
Merisel, Inc. Merisel, Inc.
000 Xxxxxxxxxxx Xxxx. 000 Xxxxxx Xxxx Xxxx Xxxx
Xx Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
3.1.3 Distributor part numbers must be affixed to three (3) of the
Spec Sheets referenced in Section 3.1.1. Distributor part
numbers must also be affixed to the back sides of Product
photographs or any sleeves containing transparencies.
3.1.4 If a Spec Sheet refers to multiple Products, all relevant
Distributor part numbers must be listed on such Spec or Data
Sheet.
3.1.5 If a Distributor part number is not available for a Product,
Supplier should refer to its own part number.
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3.2 Logos and Photos.
3.2.1 Two Supplier logos scanned at 2400 dpi resolution into EPS or
TIFF files. One of the EPS or TIFF files must contain a
black-and-white logo and one of the EPS or TIFF files must
contain a color logo.
3.2.2 One (1) approximately 2" x 3" digitized color image of each
product in high resolution CMYK TIFF format ready for output
up to 2400 dpi. (Other formats such as native PhotoShop, EPS,
etc. are also acceptable.)
OR
Digitized images are preferred, but if they are not available please send: One
(1) color photograph of each product (in 35-mm slide, 2 1/4-inch or 4 X 5-inch
transparency format). All photos must be marked with Merisel SKU number and/or
Manufacturer's UPC code. Merisel SKU number and/or Manufacturer UPC code must
also be affixed to the back side of product photos or any sleeves containing
transparencies.
3.3 EMPTY BOXES. Two (2) empty boxes for each of Supplier's software
and/or accessory Product(s) distributed by Distributor.
4. SOFTWARE AND HARDWARE PRODUCT FOR EVALUATION TESTING.
4.1 For all Products which Distributor has not previously
distributed, including, but not limited to, new models or
software updates which differ significantly from previous
releases, Supplier shall provide fully-functional
"Not-For-Resale" ("NFR") software or hardware units of the
Product(s) for a ninety (90) day evaluation testing by
Distributor's Technical Support department, as follows:
4.1.1 Evaluation/NFR units of Products shall be sent to
Distributor's Technical Support operations as follows:
National Manager, Tech Support Tech Support Operations
Merisel, Inc. Xxxx Xxxxx
000 Xxxxxxxxxxx Xxxx. Merisel, Inc.
Xx Xxxxxxx, XX 00000 000 Xxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
2 Fully-functional copies of 1 Fully-functional copy of
1 unit of each Hardware Software
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Product
4.2 Supplier must complete and FAX a "Product Tracking Form" to
the Distributor Product Information Center when any unit of
evaluation/NFR Product is shipped as set forth in Section 4.1
above. The Product Tracking Form is available from
Distributor's on-line FAX-back service; Supplier may obtain
the FAX number for such service from the Product Information
Center.
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EXHIBIT C
D.A.T.A. BANK CORE PROGRAM
U.S. Program (U.S. dollars)
Supplier agrees to participate in the D.A.T.A. Bank Program under the following
terms and conditions:
PARTICIPATION DETAILS
1. Initial program, period: Annual: August 1st - July 31st of each year (the
"Program Period'). Participation starting after August 1st of any year
will be prorated. Merisel will invoice Supplier every three months for the
previous three months through July 31st of each year.
2. If Supplier wishes to discontinue participation in the D.A.T.A. Bank
Program, Supplier must provide a minimum of thirty (30) days written
termination notification before the end of the initial, or any subsequent,
Program Period, to the Director of Marketing for Distributor's "'The
Information Company" and Distributor's Contracts Administration Manager.
If such notification is not received within such thirty (30) day period,
Supplier's participation in the D.A.T.A. Bank Program will automatically
renew for that year and each year thereafter unless Supplier provides such
thirty (30) day minimum written notice of its intent to terminate its
participation in the D.A.T.A. Bank Program prior to the end of any Program
Period. Merisel has the right to cancel Supplier's program participation
by providing a minimum, of thirty (30) days written cancellation
notification to Supplier.
3. Supplier must participate in the D.A.T.A. Bank Core Program in order to
participate in unique, targeted Add-on Marketing Opportunities (a separate
contract will be provided for such Add-on Marketing Opportunities).
4. To ensure the D.A.T.A. Bank database remains current, reports will be
provided to participating Suppliers listing an inventory of library items
per SKU at least every two months.
5. Proof of performance will consist of one copy of SELline (one time only,
updates on-line), one copy of each CD-ROM and a listing of SKUs in the
Literature Fax-back System. By signing this agreement, Supplier waives all
rights to further proof of performance.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6. Suppliers are encouraged to promote their participation in D.A.T.A. Bank
with the use of the SELline and D.A.T.A. Bank logos in their reseller
communications.
7. Speed of upload of Supplier Information will depend on quality, volume and
timeliness of information submitted to Merisel by Supplier.
PARTICIPATION REQUIREMENTS
Supplier must maintain current information in Merisel libraries at all times by
providing the necessary coding and supporting materials through the ongoing
product set-up process to take full advantage of D.A.T.A. Bank (e.g., Product
Detail is driven by class codes submitted by Supplier during product set-up).
PARTICIPATION FEES
Participation In D.A.T.A. Bank consolidates the distribution of your information
through Merisel's electronic media: SELline, Salesnet, CD-ROM, and Literature
Fax-back System.
Annual fees (which include setup and maintenance) will be billed [**] and are
based on current Merisel Price Book SKU count a of the date of billing
("baseline" SKU count) and up to 50MB of Library information storage space. If
Supplier SKU count is significantly exceeded (defined as [**] baseline SKU
count), Supplier will be required to upgrade to the next participation level.
Add-on Marketing Opportunities are offered at additional fees.
Fees:
[**]
[The D.A.T.A. Bank Program replaces the current On-Line Literature Library
(OLLL). This agreement supersedes any prior agreement or terms for the OLLL
program. By signing this agreement, Supplier authorizes Merisel to transfer
funds remaining in the OLLL to D.A.T.A. Bank Program equivalents.]
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EXHIBIT D
CERTIFICATE OF ORIGIN
(Document Original To Be Attached)
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MERISEL AND MERCHANDISING SOLUTIONS
MILITARY EXCHANGE PROGRAM AMENDMENT
This amendment (the "Amendment") is made as of by __________________________ and
between Merisel Americas, Inc. ("Distributor") and Dragon Systems, Inc.
("Supplier") and constitutes an amendment to the Distributor Agreement between
Distributor and Supplier dated (the "Agreement"). This Amendment is
applicable to Products purchased for resale to Military Exchange Customers of
Merisel; purchases of Products by Distributor for resale to other customers
shall remain governed by the Agreement without reference to this Amendment. To
the extent this Amendment conflicts with the terms of the Agreement, the terms
of this Amendment shall govern and shall replace and supersede the Agreement; to
the extent this Amendment conflicts with, or adds to, the terms of any amendment
executed prior to the date of execution below, the terms of this Amendment shall
govern and shall replace and supersede the previously executed document; all
other terms and conditions of the Agreement shall remain in full force and
effect. In consideration of the representations, warranties, covenants and
agreements set forth herein and intending to be mutually bound, the parties
hereto agree as follows:
1. MILITARY EXCHANGES PROGRAM PARTICIPATION: Supplier agrees to participate
in Distributor's Military Exchange Program. Such participation in the Program
provides the following benefits:
- Products(s) placed in approximately 225* military bases worldwide.
- Products priced competitively.
- Product inventory is managed remotely (electronically) and through planned
monthly in-store visits* which guarantees accurate inventory and
exceptional reporting.
- Product presentations and POP placements are managed through monthly
in-store visits*.
- Proof of performance reporting, including sales, turns, and returns is
provided monthly.
- No charge to Supplier for on-site destruction by detailing partner*.
* Number may vary based on base openings and/or closings, and
allowable Planogram (number of SKUs at each base location).
Detailing is provided by Watt/Xxxxx Universal.
2. MILITARY EXCHANGES PARTICIPATION COSTS: To defray the costs of supporting
the Military Exchange's contractual requirements for:
- Best of class pricing
- International freight
- In-store inventory management
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
- In-store detailing
all provided by Distributor and Merchandising Solutions; Distributor shall
debit, monthly, from amounts owed to Supplier, an amount equal to [**] of the
Cost Of Goods Sold (COGS), based on net sales.
3. EXCEPTION RETURNS. Returns from Military Exchange Customers are limited,
by Distributor, to [**] of the Military Exchange Customer's net purchases made
in the prior calendar quarter. In the event any Military Exchange Customer
returns Product in excess of [**] of such Military Exchange Customer's purchases
of Supplier's Product(s) made in the preceding calendar quarter, Supplier shall
be charged an Exception Returns fee equal to [**] of the aggregate value of the
Product returned which exceeds the [**] Military Exchange Customer returns
allowance to offset the costs incurred by Distributor to handle each such
exception return. In the event the parties mutually determine that a substantial
return was the sole result of Distributor's actions, that return shall not count
towards the percentages set forth above.
4. DESTRUCTION OF PRODUCT. At Supplier's option, Distributor shall arrange to
have destroyed at an on-site location all Product that Distributor would
otherwise have the right to return under the terms and conditions of the
Agreement and/or of this Amendment. Distributor shall contact Supplier, on a
case by case basis, to either arrange the return of such Product, or arrange the
destruction of said Product, at Supplier's option. Product that is destroyed in
accordance with the terms and conditions of this section shall not be subject to
the Exception Returns fee outlined above in Section 3. Supplier shall be
responsible for all costs of such on-site destruction of said Product, should a
charge for such service in the future arise.
5. REPORTS AND PAYMENT OF CREDITS. Within fifteen (15) days after the end of
each month, Distributor shall provide Supplier with a report detailing the
number of units and aggregate Purchase Price of all Products shipped by
Distributor to Military Exchange Customers of Merisel in such month and the
amount of credit due Distributor under this Amendment. Distributor will deduct
such amount from amounts due Supplier. In the event (i) no uncontested amounts
are due Supplier by Distributor, or (ii) the amount of such uncontested amount
due to Supplier is not equal to the amount of such credit, Supplier shall pay
Distributor the full amount or remaining balance of such credit promptly upon
written request by Distributor, in a manner that is acceptable to Distributor.
This Amendment shall not be binding upon either party hereto until it has been
executed by a duly authorized officer of each party. This Amendment may not be
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released or modified except by the mutual written consent of both Distributor
and Supplier as attested to by an instrument signed by an officer of each of
them.
Except as modified herein, the terms and conditions of the existing
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year first
above written.
MERISEL AMERICAS, INC. DRAGON SYSTEMS, INC.
000 Xxxxxxxxxxx Xxxx. Address: 000 Xxxxxx Xxxxxx
X.X. Xxx 000 Xxxxxx, XX 00000
Xx Xxxxxxx, XX 00000-0000
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- -----------------------------
Name: XXXXX XXXXXXXX Name: Xxxxx X. Xxxxx
Tide: VICE PRESIDENT Title: President
PRODUCT & INVENTORY MANAGEMENT
Date: 1/7/98 Date: Dec 29, 1997
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RETAIL DIVISION
DISTRIBUTION AGREEMENT AMENDMENT
This amendment (the "Amendment") is made as of by and between Merisel
Americas, Inc. ("Distributor") and Dragon Systems, Inc., ("Supplier") and
constitutes an amendment to the Distributor Agreement between Distributor and
Supplier dated (the "Agreement"). This Amendment is applicable to
Products purchased for resale to Distributor's Retail Division Customers of
Merisel's Retail Products Division; purchases of Products by Distributor for
resale to other customers shall remain governed by the Agreement without
reference to this Amendment. To the extent this Amendment conflicts with the
terms of the Agreement, the term of this Amendment shall govern and shall
replace and supersede the Agreement; all other terms and conditions of the
Agreement shall remain in full force and effect. In consideration of the
representations, warranties, covenants and agreements set forth herein
(including the definitions set forth in Exhibit A hereto) and intending to be
mutually-bound, the parties hereto agree as follows:
1. Retail Division Programs.
1.1 Administrative Services, Distributor agrees that it will distribute
and license Products purchased under this Amendment only to Retail Division
Customers. As used in this Amendment, "Retail Division Customer" shall mean any
entity who purchases products from the Retail Products Division of Distributor
for sale to end-users and for which Distributor provides one or more of the
following services: monthly inventory forecasting models; monthly inventory
audits to determine stock on hand and sell-through; dedicated customer support
representatives for stock balancing, product version change rotation,
refurbishment procedures and special return authorization requests; specialized
financing options; dedicated accounts receivable management representatives and
procedures; special operations support including customer-specific product
labeling, unique carton markings and special freight handling procedures; and
weekly telecopy reports detailing new product additions, product version
changes, discontinued products, product price changes, and promotional
opportunities.
1.2 Mutual Funds Program. Supplier shall cooperate, with Distributor's
Retail Products Division in the Mutual Funds Program for its Retail Division
Customers. Mutual Funds provided to Distributor by Supplier for the Mutual Funds
Program shall be passed through to the Retail Division Customer by Distributor.
In addition, Supplier may, from time to time at its sole discretion, separately
authorize Distributor to conduct advertising and other activities and may agree
at that time to pay the costs from funds outside of the allowance granted in the
preceding sentence. In the event Supplier elects to terminate the provision of
funds under this Section 1.2, Supplier shall provide Merisel with not less than
ninety (90) days prior written notice
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
of such termination, and such notice shall be sent in accordance with the Notice
requirements set forth in the Agreement.
2. Retail Division Fees and Rebate.
2.1 Administrative Services Fee. To defray the cost of the Administrative
Services set forth in Section 1.1 above provided by Distributor to Retail
Division Customers, Supplier shall credit Distributor's account, in accordance
with the procedures described in Section 6.1, with an amount equal to [**] of
the aggregate Purchase Price of all Products shipped by Distributor to Retail
Division Customers.
2.2 Mutual Funds Cost. Supplier shall be responsible to pay as its share
of the cost of the Mutual Funds Program an amount equal to [**] of the Retail
Product Division's net cost of goods sold to those Customers listed on Exhibit
B. Exhibit B may be amended from time to time to reflect additional Retail
Division Customers. If Supplier wishes to exclude any of the additional Retail
Division Customers from the Mutual Funds Program, Supplier must promptly notify
Distributor, in writing. Supplier shall credit Distributors account with the
amounts contemplated under this Section 2.2, in accordance with the procedures
described in Section 6.1.
2.3 Automatic Rebate. In the event Distributor is able to secure the
placement of any of the Products purchased hereunder with any Retail Division
Customer listed on Exhibit C. Supplier shall provide Distributor with a
one-time, non-recurring rebate of an additional [**] of the aggregate value of
the initial stocking order placed by the Retail Division Customer with
Distributor. Such rebate will be paid to Distributor by Supplier within thirty
(30) days after Distributor's placement of the initial stocking order for such
new Retail Division Customer, in accordance with the procedures described in
Section 6.2.
3. Product Changes and Price Protection.
3.1 In the event that Supplier shall (a) sell any additional Product not
set forth in the Agreement (b) introduce a new version or materially change the
specifications or packaging of, or discontinue any Product, or (c) change the
Suggested List Price of any Product, Supplier shall notify Distributor at least
as quickly as Supplier notifies any other customer of Supplier. Such notice
shall be sent via certified mail, Federal Express or other express mail service,
to the Product and Inventory Management Department of Distributor.
3.2 In the event that the Purchase Price of any Product is reduced through
a reduction in the Suggested List Price of such Product or any other price or
Discount
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
reduction is made by Supplier, on a temporary or permanent basis to any other
distributor, Supplier will credit to Distributor an amount equal to the product
of (a) the difference between the new Purchase Price and the former Purchase
Price for such Product and (b) the number of units of such Product then in
Distributor's Inventory or Distributor's Retail Division Customers' inventory,
such credit to be paid as set forth in accordance with the procedure specified
in Section 6.2 hereof. All orders in transit and unshipped orders already
scheduled by Supplier for Product affected by such price reduction shall be
automatically adjusted by Supplier to reflect such decrease. If the purchase
price of any Product is increased, Supplier shall honor any Distributor purchase
orders placed prior to the effective date of the increase at the price in effect
immediately prior to the time the increase is announced.
4. Product Returns: Stock Balancing, Discontinued Products, Exception
Returns.
4.1 Distributor may at any time or from time to time after the date hereof
return to Supplier all Products from Inventory, including those Products
returned by the Retail Division Customers during the term of the Agreement, upon
written notice to Supplier. Within thirty (30) days of Supplier's receipt of
such returned Products, Supplier shall credit Distributor with an amount equal
to the Return Price of such Products, in accordance with the procedures
described in Section 6.2. Distributor will bear the transportation costs to
Supplier's U.S. location for all Products so returned.
4.2 In the event Supplier discontinues any Product or declares any Product
to be obsolete, or end-of-life, Distributor shall have the right to return all
units of such Product then in its Inventory, including those Products returned
by the Retail Division Customers during the term of the Agreement, for credit in
the amount of the Return Price of such discontinued Product, such credit to be
paid in accordance with the procedures described in Section 6.2. Supplier will
bear the transportation costs to Supplier's U.S. location for all Products so
returned.
4.3 In the event the Retail Division Customer returns any Product to
Distributor, based on the failure of such Product to sell at an acceptable level
through the Retail Division Customer, Distributor shall have the right to return
all units of such Product then in its Inventory, including those Products
returned by the Retail Division Customers during the term of the Agreement, for
credit in the amount of the Return Price of such Product. Such credit shall be
paid in accordance with the procedures described in Section 6.2. Distributor
will bear the transportation costs to Supplier's U.S. location for all Products
so returned.
4.4 Exception Returns: Returns from Retail Division Customers are limited,
by Distributor, to [**] of the Retail Division Customer's net purchases made in
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
the prior calendar quarter. In the event any Retail Division Customer returns
Product in excess of [**] of such Retail Division Customer's purchases of
Supplier's Product(s) made in the preceding calendar quarter, Supplier shall be
charged an Exception Returns fee equal to [**] of the aggregate value of the
Product returned which exceeds the [**] Retail Division Customer returns
allowance to offset the costs incurred by Distributor to handle each such
exception return. In the event that the parties mutually determine that a
substantial return was the sole result of Distributor's actions, that return
shall not count towards the percentage set forth above.
5. Defective Products. Distributor may return any unit of Product which it or
any Retail Division Customer finds to be defective in workmanship or material or
damaged in shipment to Distributor for credit in the amount of the Return Price
of such unit. Such credit shall be paid in accordance with the procedures
described in Section 6.2. All transportation charges for Product so returned
shall be borne by Supplier.
6. Reports and Payment of Credits.
6.1 Within fifteen (15) days after the end of each month, Distributor
shall provide Supplier with a report detailing the number of units and aggregate
Purchase Price of all Products shipped by Distributor to Retail Division
Customers in such month and the amount of credit due Distributor under Sections
2.1 and 2.2 hereof with respect thereto. Within thirty (30) days of receipt of
such report, Supplier shall credit Distributor's account for the aggregate
credit set forth in such report. If such credit is not received within such
thirty (30) day period, Distributor may, at Distributor's option, deduct such
amount from amounts due Supplier. In the event (i) no uncontested amounts are
due to Supplier by Distributor; or (ii) the amount of such uncontested amount
due to Supplier is not equal to the amount of such credit, Supplier shall pay
Distributor the full amount or remaining balance of such credit promptly upon
written request by Distributor.
6.2 Any credits due to Distributor, by Supplier, as specified in Sections
3.2, 4.1, 4.2, 4.3, 4.4 and 5 of this Amendment shall be paid to Distributor
within thirty (30) days from the date of the return for which such credit is to
be issued. Any such credit shall be applied to any uncontested, outstanding
amounts due to Supplier by Distributor with respect to the Products. In the
event (i) no uncontested amounts are due to Supplier by Distributor; or (ii) the
amount of such uncontested amount due to Supplier is not equal to the amount of
such credit, Supplier shall pay Distributor the full amount or remaining balance
of such credit promptly upon written request by Distributor.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
7. Other Term and Provisions.
7.1 In the event of any shortage of newly launched Product(s), upon order
by Distributor, Supplier shall ship to Distributor a pro rata share of available
Product based on the percentage of Product previously purchased by Distributor
in the prior two (2) calendar quarters in relation to other similarly situated
distributors and aggregators
7.2 Supplier shall xxxx each Product sold under this Amendment with the
appropriate UPC Bar Code and shall, upon the request of Distributor, provide
Distributor with all information regarding the UPC Barcode and its contents.
Supplier shall indemnify Distributor, hold it harmless and reimburse it for any
and all expenses or costs incurred by Distributor in the event such bar code, or
bar code information, is incorrect or erroneous.
7.3 In the event that the Agreement is terminated, Distributor shall have
the right to return any or all Products of Supplier remaining in Distributor's
inventory, its Retail Division Customers' inventory and/or returned to
Distributor by its Retail Division Customers [**] under its dealer stock
balancing program. Supplier shall repurchase such returned products at their
Return Price.
7.4 Execution. The Amendment shall not be binding upon either party hereto
until it has been executed by a duly authorized officer of each party. This
Amendment may not be released or modified except by the mutual written consent
of both Distributor and Supplier as attested to by an instrument signed by an
officer of each of them.
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Except as modified herein, the terms and conditions of the existing Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year first
above written.
MERISEL AMERICAS, INC. DRAGON SYSTEMS, INC.
000 Xxxxxxxxxxx Xxxx. 000 Xxxxxx Xxxxxx
X.0. Xxx 000 Xxxxxx, XX 00000
Xx Xxxxxxx, XX 00000-0000
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------------- ---------------------------
Name: XXXXX XXXXXXXX Name: Xxxxx Xxxxx
Title: VICE PRESIDENT Title: President
PRODUCT & INVENTORY MANAGMENT
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EXHIBIT A
DEFINITIONS
For the purpose of this Agreement, the following terms shall have the meanings
set forth below:
1. "Discounts" shall mean the discount from the Suggested List Price of
the Product used to determine the Purchase Price of such Product.
2. "Distributor" shall mean any person or entity purchasing Products from
Supplier for sale to Retailers.
3. "Inventory" shall mean at any time all units of Product (a) in
Merisel's inventory, (b) ordered by Merisel but not yet received by Merisel at
such time, and/or (c) returned by Retail Division Customers to Merisel within
one hundred eighty (180) days of such time.
4. "Merisel" shall mean Merisel, Inc. and any parent, subsidiary or
affiliated corporations it may have during the term hereof.
5. "Products" shall mean all of the present and future personal computer
and related products designated by Supplier for standard retail distribution in
U.S. and Canada during the term of this Amendment and all improvements and
variations thereof, including, without limitation, all foreign language versions
for distribution in the U.S. and Canada.
6. "Purchase Price" of any Product shall be as determined under the
Agreement.
7. "Retailer" shall mean any person who sells any Product to end-users in
retail stores.
8. "Return Price" for any unit of Product shall mean the amount originally
billed Merisel for such unit less any rebates or amounts under Section 2 with
respect to such unit actually paid or credited by Supplier to Merisel.
9. "Reseller" shall mean any person or entity who resells any product.
10. "Suggested List Price" of any Product shall mean the retail sales
price of such Product as suggested by Supplier to retailers.
EXHIBIT B
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Mutual Funds Retailer List
2Connect Computer Emporium Home Shopping
47th St. Photo Computer Express Network
Aafee Computer Express Inc. Tri-City Sales, Inc.
ABM Group Corp. Computer Hut Information
Advanced Logic Computer Images Technologies, Inc.
Industries, Inc. Computer Marketplace, Infostar, Inc.
Advanced Micro Inc. Intelicom, USA
Solutions Computer Network J&R Computer World
American Appliance Services Jade Systems
Anmar's Computer Network Jonathan's Computer
Xxx & Hope Systems Corp. Centers
Apex Department Stores Computer Paradise K & K Laser Graphix
Xxxxxxx Appliance & TV Computer SuperCenter Xxx-Bee Toy Stores
Atlantic N.E. Marketing, Computer Systems of Key America
Inc. Sumter KFBC, Inc.
AVR Enterprises, Inc. Computer Town L.O.S.
Xxxxxx & Xxxxx Computerbanc Corporation/Nationwide
Beat Street Computers Etc. Laptop Superstores
BJ's Wholesale Club Connect Computer Corp. Learning Xxxxx
Xxxxxxxxxx'x Connecting Point Xxxxxx Computers
Boscov's Department Computer Ctr. Management Advisory
Store County TV & Appliance Software
Brandsmart USA CyberPlay XxXxxxxxx, Inc.
Burdines Cybersmith McCartney's Computer
Caldor CyberWarehouse Center
Capitol Computers, Inc. Daily Business Mega Port, Inc.
Central Data Computer Products/ISG Metro Business Systems
Ctrs Data Trend, Inc. Micro Products
Xxxxxx Computer Datavision Computer Micro-Computer Centre
Assoc., Inc. Video Micro/Center
Chemung Computer Electronics Boutique MicroGallery, Inc.
Cherrytree Software Friendship Computer Microland
Circuit City Stores Supplies MicroRetailing, Inc.
Clipper Technologies, Future Computer Inc. Moovies
Inc. H & H Service Store More Computers
College & University Hartney Enterprises Inc. N.E. Microcomputer
Computers Xxxxxx-Xxxxxx Solution
Comcity Inc. HMV Record Stores Nationwide Comp. &
Command Services Xxxxxxx'x Electronics
Compunet Home Depot Nationwide Computers
Computeam Home Entertainment Co. Nationwide TV &
Computer Concepts Inc. Appliance
-8-
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NATM Technology Works, Inc.
Navy Exchange The ASCII Group
Command The Computing Center
Nobody Beats the Wiz The Consumer
Noodle Kidoodle Expo/Event Mkt.
OEO, Inc. The Molway
Office Depot Corp./Bitznbytes
Omnitech Computer, The Xxxxxxx Group, Inc.
Inc. TOPS Appliance City
P.C. Xxxxxxx & Son Toys R Us
Xxxxxxxxx-Erie Corp. TransNet Corporation
PC Connection UL&F Computers
PC Warehouse Un-Plug it
PC's Complete United CD-ROM
Percy's Univ. System & Service
Personal Computer of Princeton
Store, Inc. Valens Information
QVC Systems, Inc.
RCS Xxxxxx, Inc.
Xxxxxxx Well Informed
Sason Corporation Computing
Shoreline Computers West Coast
Inc. Entertainment
Simplex Computer Whalley Computer
Centers Assoc., Inc.
Sixth Avenue Electronics Wood Market, Ltd.
City Zany Brainy
Software City
Software City Computer
Center
Software City Computer
Center
Software City of Puerto
Rico
Spec's Music
Staples, Inc.
State Street Discount
Sunrise Computers
Syracuse Computer
Store, Inc.
System Plus Computers,
Inc.
Technical Challenge, Inc.
Technical Institute
-9-
33
Exhibit C
Automatic Rebate Retailer List
Connect Learning Xxxxx The Consumer Expo/Event Mkt.
Capitol Computers, Inc. Metro Business Systems TOPS Appliance City
Xxxxxx Computer Assoc., Inc. Micro-Computer Centre Well Informed Computing
Cherrytree Software MicroGallery, Inc. Whalley Computer Assoc., InC.
Comcity Inc. MicroRetailing, Inc.
Command Services More Computers
Compunet Nationwide Comp. & Electronics
Computeam Omnitech Computer, Inc.
Computer Concepts Inc. PC. Connection
Computer Emporium PC's Complete
Computer Express Personal Computer Store, Inc.
Computer Express Xxxxxxx
Computer Hut Sason Corporation
Computer Images Shoreline Computers Inc.
Computer Marketplace, Inc. Simplex Computer Centers
Computer Network Services Sixth Avenue Electronics City
Computer Network Systems Corp. Software City
Computer SuperCenter Software City Computer Center
Computer Systems of Sumter Software City Computer Center
Computers Etc. Software City of Puerto Rico
Connect Computer Corp. Syracuse Computer store, Inc.
Connecting Point Computer Ctr. The Computing Center
-10-
34
DRAGON SYSTEMS, INC.
The Natural Speech Company 000 XXXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
AMENDMENT
March 10, 1998
Mr. Xxxxx Xxxxxxxx
MERISEL AMERICAS, INC.
000 Xxxxxxxxxxx Xxxx.
X.X. Xxx 000
Xx Xxxxxxx, XX 00000-0000
Dear Xx. Xxxxxxxx:
In light of the training and special use requirements of Dragon
NaturallySpeaking,(TM) Deluxe Edition and other high-end products, we are now
requiring Certification of all our Resellers who resell our Deluxe Edition.
Distributors may not sell such product to any Reseller who does not have this
Certification. Therefore, the following provision amends the January 7, 1998
Agreement between DRAGON and Merisel and is to be inserted as Paragraph 10.11 in
the Agreement.
10.11 "Reseller Certification. Commencing on March 1, 1998, DRAGON
requires that all its Distributors use reasonable efforts to ensure that
their resellers procure a Certification Number from DRAGON that allows the
reseller to sell Dragon NaturallySpeaking(TM), Deluxe Edition and other
high-end DRAGON products (generally, those products which retail for $500
or more). Resellers are specifically prohibited from selling these
products without this Certification. Distributor may not sell such
products without first ascertaining that the reseller has procured such
Certification."
Please sign below indicating your acknowledgment and acceptance of this
Amendment.
Sincerely,
/s/ X. Xxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxx
Director, North American Sales
ACKNOWLEDGED AND ACCEPTED
By: Xxxxx X. Xxxxxxxx
--------------------------
Signature: /s/ Xxxxx X. Xxxxxxxx
Title: VP Product / Inventory Mgt
Date: 5/13/98
tel + 0 (000) 000-0000 fax + 0 (000) 000-0000 xxx.xxxxxxxxxxxxx.xxx
-11-
