MANUFACTURING AND MARKETING AGREEMENT
between
XXXXXXXXXXXXXXXXXX.XXX INC.
and
TANDY CORPORATION
TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
2. INTELLECTUAL PROPERTY.................................................2
2.1. Ownership of Intellectual Property...........................2
2.2. License to Manufacture.......................................2
2.3. License to Market............................................2
2.4. Retention of Rights..........................................3
2.5. Exclusivity..................................................3
2.6. Indemnification..............................................3
2.7. Designs. Molds and Tools.....................................4
2.8. Warranty of Patent Application...............................4
2.9. License for Internet and Other Uses..........................4
3. MANUFACTURING.........................................................4
3.1. Manufacturing Relationship...................................4
3.2. Quality......................................................5
3.3. Cost Reduction...............................................5
3.4. Orders.......................................................5
3.5. Delivery, Inspection and Acceptance..........................7
3.6. Reports......................................................8
3.7. Warranties of Manufacture....................................8
3.8. Disclaimer...................................................8
3.9. End User Returns.............................................8
3.10. Prototypes...................................................9
3.11. Large Scale Failures.........................................9
3.12. Second Sourcing..............................................9
4. MARKETING AND DISTRIBUTION............................................9
4.1. Marketing and Distribution Manager[s]........................9
4.2. Distribution................................................10
4.3. Deployment..................................................10
4.4. Media.......................................................10
4.5. Packaging...................................................10
4.6. Marketing...................................................10
4.7. Sales Incentives............................................11
4.8. Advertising.................................................11
4.9. End User License............................................12
4.10. Import......................................................12
-i-
5. SERVICES WARRANTY....................................................12
5.1. Services....................................................12
6. TRAINING.............................................................12
6.1. Training Program Development................................12
6.2. Training Program Dissemination..............................12
7. PAYMENT AND CONSIDERATION............................................13
7.1. Pricing.....................................................13
7.2. Export and Import Fees......................................13
7.3. Payment.....................................................13
7.4. Other Consideration.........................................13
8. AUDIT................................................................14
8.1. Records of Tandy............................................14
8.2. Records of Digital Convergence..............................14
9. TERM AND TERMINATION.................................................14
9.1. Term of Agreement...........................................14
9.2. Termination.................................................14
10. LIMITATIONS OF LIABILITY.............................................14
10.1. Limitations for Digital Convergence..........................14
10.2. Limitations for Tandy........................................15
10.3. Agreed Allocations of Risk...................................15
11. CONFIDENTIAL INFORMATION.............................................15
11.1. Disclosure and Use Limitations...............................15
11.2. Subpoena Procedure...........................................16
11.3. Remedies.....................................................16
11.4. Return or Destruction of Materials...........................16
12. MISCELLANEOUS........................................................17
12.1. Notice Generally.............................................17
12.2. Assignment...................................................17
12.3. Headings.....................................................18
12.4. Governing Law; Venue; Limitations............................18
12.5. Costs........................................................18
12.6. Delays.......................................................18
12.7. Severability.................................................18
12.8. Waiver.......................................................18
-ii-
12.9. Entire Agreement.............................................19
12.10. Approvals and Consents.......................................19
12.11. Further Assurances...........................................19
12.12. Representation of Counsel; Mutual Negotiation................19
12.13. Supremacy of Contract........................................19
12.14. Media Releases...............................................19
12.15. No Partnership...............................................19
12.16. Wireless Concerto............................................19
12.17. Premium Product..............................................20
12.18. Agreement Binding on Successors..............................20
12.19. Sales, Use, Property Taxes...................................20
-iii-
This MANUFACTURING AND MARKETING AGREEMENT (this "Agreement"),
effective as of December 6, 1999 (the "Effective Date"), is between
XxxxxxxXxxxxxxxxxx.xxx Inc., a Delaware corporation ("Digital Convergence") and
Tandy Corporation, a Delaware corporation and its wholly-owned subsidiary A&A
International, Inc. ("A&A" and collectively, "Tandy") (hereinafter collectively
referred to as the "Parties" and individually as a "Party").
The Parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
"Authorized Manufacturer" shall mean a manufacturer that: (i) is
selected by Tandy; and (ii) has been approved by Digital Convergence in writing.
"Confidential Information" shall mean all information disclosed by a
Party (the "Disclosing Party") to the other Party (the "Receiving Party") (in
writing, orally, or in any other form) that is identified as confidential or
proprietary or that, due to the nature of the information or the circumstances
surrounding disclosure, ought to be treated as confidential or proprietary,
including but not limited to financial plans, strategic plans, customer lists,
technical documentation, software, and, business marketing information.
"Confidential Information" shall not include, however, information: (i)
previously known to the Receiving Party before receipt from the Disclosing
Party; (ii) independently developed by the Receiving Party without access to the
Disclosing Party's information; (iii) acquired by the Receiving Party from a
third party which is not under an obligation to the Disclosing Party not to
disclose such information; or (iv) which is or becomes publicly available
through no breach by the Receiving Party of this Agreement, expressly including
becoming available through the issuance of a patent.
"Digital Convergence Intellectual Property" shall mean all Intellectual
Property: (i) owned by Digital Convergence as of the date hereof; or (ii)
developed by or on behalf of Digital Convergence for use in connection with the
Product(s), including without limitation the Digital Convergence Technology.
"Digital Convergence Technology" shall mean the unique technology
utilized in the product known as K.A.T.-TM- or :CAT-TM- and the software
known as Concerto-TM-.
"Documentation" shall mean printed or electronic materials intended to
assist an end-user in installing or operating a Product.
"Intellectual Property" shall mean all trademarks, service marks, trade
names, Internet domain names, designs, logos, slogans and general intangibles of
like nature, together with: goodwill, regions and applications relating to the
foregoing; registered patents and unregistered patents pending; copyrights
(including registrations and applications); computer programs, including
1
any and all software implementation of algorithms, applications, tools, models
and methodologies whether in source code or object code, databases and
computations, including any and all data and collections of data, all
documentation, including user manuals and training materials, relating to any of
the foregoing; and technology, know-how, inventions, processes, formulae,
algorithms, models, trade secrets and methodologies.
":CAT Product(s)" shall mean a handheld device with the capability to
read a plurality of barcode formats, the ultimate purpose of which is to direct
an end user to a specific Web Site on the Internet or to any software
application on their desktop, all as finther described in Exhibit A of this
Agreement.
"Product(s)" shall mean the "Keystroke Automation Technology" and the
"Concerto Software Media" products described in Exhibit A, as amended in writing
by the parties from time to time, including components and software.
2. INTELLECTUAL PROPERTY
2.1. OWNERSHIP OF INTELLECTUAL PROPERTY. As between Tandy and Digital
Convergence, Tandy acknowledges and agrees that all Digital Convergence
Intellectual Property shall be the sole property of Digital Convergence, and
that Tandy shall not gain any right, title, or interest in such Digital
Convergence Intellectual Property except as expressly provided under this
Agreement.
2.2. LICENSE TO MANUFACTURE. Subject to the terms of this Agreement,
Digital Convergence hereby grants to Tandy a limited, royalty-free, personal,
nonexclusive, revocable, worldwide license, pursuant to Digital Convergence's
Intellectual Property, to:
(a) make, have made, uses have used, manufacture and have
manufactured, import and have imported :CAT Products and to test,
repair, modify, and assemble the :CAT Products;
(b) sublicense the rights granted in (a) above and below, to
Authorized Manufacturers, provided however that Tandy shall impose
confidentiality restrictions and intellectual property protections
which are at least as strict as those in this Agreement; and
(c) copy, use and install the software necessary for the
manufacture of the :CAT Products.
2.3. LICENSE TO MARKET. Subject to the terms of this Agreement, Digital
Convergence hereby grants to Tandy a limited, royalty-free, personal,
non-exclusive, nationwide (including U.S. territories), revocable license,
pursuant to Digital Convergence's Intellectual Property, to:
2
(a) package, publish, market, sell (with the prior written
approval of Digital Convergence), ship, maintain, support, upgrade
and/or distribute the Products, in whole or in part;
(b) generate and distribute marketing materials featuring the
Products, in whole or in part; and
(c) use the :CAT and Concerto trademarks in connection with
the advertising, promotion, distribution, and sale of Products,
provided that such use is consistent with the format and rules of use
set out in Exhibit B, or as otherwise agreed by the Parties.
2.4. RETENTION OF RIGHTS. All rights to Digital Convergence
Intellectual Property which are not expressly granted to Tandy in this Section 2
are retained by Digital Convergence.
2.5. EXCLUSIVITY. Without the prior written consent of Digital
Convergence, neither Tandy nor any Authorized Manufacturer shall manufacture,
distribute or offer for sale:
(a) Any product, other than the Products, that makes use of
the Concerto-TM- software; or
(b) Any product during the team of this Agreement that is
substantially similar in design, function and results to the
Concerto-TM- software or the :CAT Product (while interacting with the
Concerto software).
This provision shall not restrict Tandy from offering for sale products
distributed by third persons that make use of Internet navigation devices.
2.6. INDEMNIFICATION. For all Products, Digital Convergence will
indemnify and hold harmless or, at its sole option, settle any action or claim
brought against Tandy to the extent that it is based upon a claim that any
Product infringes any patent rights, copyright rights, or other intellectual
property rights, or incorporates any misappropriated trade secrets (a "Claim").
Digital Convergence will pay any damages finally ageed to or awarded against
Tandy that are attributable to such Claim and that are awarded against Tandy in
a judgment or settlement approved in advance by Digital Convergence, provided
that: (i) Tandy promptly notifies Digital Convergence in writing of the Claim or
any threat thereof, (ii) Tandy grants Digital Convergence sole control of the
defense and settlement of the Claim; and (iii) Tandy provides Digital
Convergence with all assistance, information, and authority reasonably required
for the defense and settlement of the Claim at Digital Convergence's expense.
Digital Convergence shall not be responsible for damages or costs under any
settlement or compromise made without its consent. Tandy may retain their own
counsel (at their expense) to monitor and/or participate in the defense and
settlement of the Claim.
3
The foregoing indemnity does not apply to:
(a) any Claim based upon any use of a Product other than for
its intended purpose, whether by Tandy, any customer, end user, or
otherwise;
(b) any Claim which is not timely noticed to Digital
Convergence by Tandy;
(c) any Claim asserting infringement by a combination of a
Product with other products, which combination is not intended by the
Parties; and
(d) any settlement of a Claim made without Digital
Convergence's written consent.
2.7. DESIGNS. MOLDS AND TOOLS. Digital Convergence will notify Tandy
prior to issuing an "Order" (as defined in Section 3.4), and will state on the
Order itself, whether the pricing for the Order should include charges for
designs, molds and tools necessary for the manufacture of the :CAT Products.
Tandy will coordinate payment for, and assist in transferring ownership and
possession of, such designs, molds and tools from the Authorized Manufacturer to
Digital Convergence. As between the parties hereto, Digital Convergence will
own, and Tandy hereby assigns, and will cause the Authorized Manufacturers to
assign, all right, title and interest it may have in, all specifications,
designs, molds and tools used in manufacturing the :CAT Products, as well as all
:CAT Product improvements and :CAT Product manufacturing improvements created
during the term hereof.
2.8. WARRANTY OF PATENT APPLICATION. Digital Convergence represents and
warrants that it has filed one or more United States patent applications
claiming ownership of the Digital Convergence Technology, :CAT and Concerto
software and that such applications are currently pending in the United States
Patent and Trademark Office.
2.9. LICENSE FOR INTERNET AND OTHER USES. Digital Convergence also
hereby grants Tandy, during the term of this Agreement, a limited, royalty-free,
nonexclusive, worldwide, revocable license to use :CAT-TM-/Concerto-TM- -
readable codes in its XxxxxXxxxx.xxx catalogs and other advertising, and to the
extent necessary to enable the XxxxxXxxxx.xxx web site to properly recognize and
utilize such codes, to incorporate Digital Convergence Intellectual Property
into the XxxxxXxxxx.xxx web site during the term of this Agreement. Thereafter,
for a period of one (1) year, Tandy shall be entitled to a continuation of this
license at a royalty rate no less favorable to the rates charged by Digital
Convergence to its top 10 clients.
3. MANUFACTURING
3.1. MANUFACTURING RELATIONSHIP
4
(a) MANAGER. A&A will be the product sourcing manager. The
Tandy employee who shall serve as the primary contact person for Digital
Convergence on all issues related to Product production and delivery will be the
Manager of Internet Alliances (currently, Xxxx Xxxxxxxxx). The identified
contact person shall be authorized to act for Tandy, and will interact with A&A
on all product sourcing issues as well as all issues concerning the Authorized
Manufacturer and its manufacturing process, testing and analysis, and quality.
A&A will, as product sourcing manager, oversee all manufacturing operations by
Authorized Manufacturers involving or related to the :CAT Product and, if
applicable, upon the request by Digital Convergence, the pressing of CD-ROM
discs with the Concerto-TM- software.
(b) TANDY'S RELATIONSHIP WITH AUTHORIZED MANUFACTURERS. The
parties agree that although Tandy is not the manufacturer of the :CAT Products,
Tandy will stand behind the Authorized Manufacturer[s] by using its best efforts
to monitor and, to the extent possible, control the manufacturing of :CAT
Products to meet scheduled delivery dates and desired Product quality. To that
end, Tandy will cause A&A to have persons from its foreign offices monitor the
Authorized Manufacturer's[s'] adherence to production schedules, perform
sampling inspection at the Authorized Manufacturer's[s'] facility of every lot
of :CAT Products manufactured, and perform routine audits to ensure that factory
personnel are performing ongoing testing similar to that required by Tandy on
its own products.
3.2. QUALITY. Tandy agrees that it will manage the manufacture of :CAT
Products to meet the same quality goals used to manufacture its own line of
private label products. Digital Convergence may, at its sole cost and expense,
have quality control or other appropriate personnel present at all sites of
manufacture of :CAT Products and may conduct reasonable inspections of the
manufacturing processes of the :CAT Products. Digital Convergence shall
coordinate any such visits and inspections with A&A.
3.3. COST REDUCTION. The Parties acknowledge that reduction in the cost
of manufacturing the :CAT Product(s) is a primary goal of the Parties. Tandy and
Digital Convergence each agree to use commercially reasonable efforts to reduce
the manufacturing costs for the :CAT Product(s) from present levels. If Tandy
fails to reduce the manufacturing costs within six (6) months of the effective
date of this Agreement, Digital Convergence may, upon payment of all outstanding
invoices (including work in progress) and thirty (30) days prior written notice,
terminate all of Tandy's product sourcing functions under this Agreement and
cause Tandy to terminate all manufacturing by Authorized Manufacturers. This
right of limited termination shall be the sole remedy under this section.
3.4. ORDERS.
(a) PURCHASE ORDERS. Digital Convergence shall submit
manufacturing orders ("Orders") in writing to Tandy. Such Orders shall be
subject to and governed by the terms and conditions of this Agreement. The
preprinted terms and conditions of the Order form shall not apply to, and shall
be of no force and effect with regard to, any Order placed hereunder. Orders
shall, at
5
a minimum, contain: (i) a description of the Product to be manufactured; (ii)
the quantity desired; (iii) the price; (iv) the delivery date; and (v) the
delivery mechanism pursuant to Section 3.5, below.
(b) ORDER ACCEPTANCE. Upon receipt of any Order conforming to
this Agreement, Tandy will forward the Order to an Authorized Manufacturer for
acceptance. Upon receipt of such acceptance, Tandy will provide Digital
Convergence with written notice of acceptance of the Order and acknowledge
tentative delivery date(s) of ordered Products, such written notice of
acceptance to be provided within fourteen (14) business days from Tandy's
receipt of the Order.
(c) ORDER REJECTION. If the Order is rejected, Tandy will
provide written notice within fourteen (14) business days from receipt of the
Order specifying that the Order is not acceptable, stating the reasons and
giving Digital Convergence an opportunity to correct it. If the Order is not
correctable, or if the reason for rejection of the Order is Tandy's inability to
fulfill an order, Digital Convergence may exercise its Second Sourcing rights
set out in, and subject to Section 3.12 below.
(d) CANCELLATION AND RESCHEDULING. Digital Convergence may,
upon giving written notice fifteen (15) days prior to the date of actual
manufacture of Products, request that any Order be rescheduled or cancelled. In
the event of such cancellation or rescheduling, Tandy shall be entitled to
reimbursement from Digital Convergence in the amount of its reasonable, actual
costs (including costs of the Authorized Manufacturer) plus ten percent (10%) of
such costs. Such additional reimbursement, if any, shall be separately invoiced
by Tandy to Digital Convergence and due and payable within thirty (30) days from
the date of the invoice.
(e) PRODUCT SPECIFICATIONS AND DESIGN. From time to time,
Digital Convergence will provide Tandy with specifications for one or more of
the Products ("Product Specifications") which Tandy will provide to the
Authorized Manufacturer. Based upon Product Specifications, Tandy will have the
Authorized Manufacturer create a design for the Product ("Product Design") which
Tandy will provide to Digital Convergence. Digital Convergence shall either
approve or reject the Product Design in writing, and shall state the reasons for
any rejection. If the Product Design is approved, subject to Section 3.10,
Digital Convergence may begin submitting Orders for the Product. If the Product
Design is rejected, Tandy will have the Authorized Manufacturer modify the
Product Design to eliminate the basis of the rejection, and will re-submit the
Product Design for approval or rejection.
(f) REQUESTED CHANGES TO PRODUCTS. After a Product Design has
been approved, either Party may submit a written request for changes in the
Product, which the other may approve in its discretion. If the change appears to
be substantial, either party may notify the other party that formal change
control procedures will be utilized as follows: Within thirty (30) days of
receipt of a written request for a substantial change in the Product, Tandy will
discuss the change with the Authorized Manufacturer and will inform Digital
Convergence of the price effect, if any, as well as the point of incorporation
and anticipated logistic considerations of such change. Both Parties agree to
negotiate in good faith regarding the incorporation of any such change, and if
incorporated, the
6
price and other terms concerning such change. However, neither Party is under
any obligation to agree to change requests unless otherwise expressly stated in
this Agreement.
3.5. DELIVERY, INSPECTION AND ACCEPTANCE. The Parties anticipate two
basic delivery mechanisms under this Agreement. Tandy may deliver Products to
Digital Convergence or its designate for distribution by Digital Convergence or
its designate as set forth in subsection (a) below, or Tandy may deliver
Products to Digital Convergence by delivering same to Tandy's distribution
centers for distribution by Tandy to RadioShack stores, as set forth in
subsection (b) below.
(a) DELIVERY TO DIGITAL CONVERGENCE.
(i) DELIVERY. Delivery of Products to Digital
Convergence shall be deemed completed when delivered duty paid to
Digital Convergence's carrier or forwarding agent which is intended to
deliver the Products from the U.S. port of entry to their ultimate
"ship to" location (hereinafter each is referred to as a "Delivery").
Unless specified in Digital Convergence's Orders, at least thirty (30)
days prior to the scheduled delivery date, Digital Convergence shall
give Tandy written instructions regarding the ultimate "ship to"
location, forwarding agent and/or carrier and type of conveyance by
which such purchases are to be shipped from the U.S. port of entry to
the ultimate "ship to" location. Should Digital Convergence fail to
arrange and pay for the forwarding agent and/or carrier, Tandy shall
select same, which selection shall conform to the standard commercial
practices of Tandy for shipment of its products. All costs of
transportation of Products from the U.S. port of entry to the ultimate
"ship to" location shall be the responsibility of Digital Convergence.
(ii) TITLE AND RISK OF LOSS. Title and risk of loss
and damages shall pass from Tandy to Digital Convergence upon
completion of Delivery as set forth in Section 3.5(a)(i) above.
(iii) SECURITY INTEREST. Until the purchase price and
all other charges payable by Digital Convergence hereunder are received
in full, Tandy will retain a security interest in the Products, and
proceeds therefrom, under the Uniform Commercial Code. If requested by
Tandy, Digital Convergence agrees to execute such documents as may be
necessary or required by Tandy to perfect and protect such security
interest.
(iv) INSPECTION. Digital Convergence, at its sole
cost and expense, shall have the right to obtain, and Tandy will cause
the Authorized Manufacturer to provide, randomly selected Product
samples from an Order manufacturing run for testing purposes to verify
the quality of the Products to be delivered, and Tandy will cooperate
with Digital Convergence in regard to such testing and will provide a
reasonable number of Product samples upon request.
(b) DELIVERY TO RADIOSHACK STORES.
7
(i) DELIVERY. Delivery of Products to Tandy shall be
deemed completed when placed in the possession of a carrier, packed
with Tandy's standard commercial packing, F.O.B. Tandy's warehouse
facility in the United States (hereinafter each is referred to as a
"Tandy Delivery").
(ii) TIDE AND RISK OF LOSS. Title to the Products
shall pass from Tandy to Digital Convergence upon completion of Tandy
Delivery. However, risk of loss and damages shall remain with Tandy
until the Products are distributed to end users.
(iii) INSPECTION. Digital Convergence, at its sole
cost and expense, shall have the right to obtain a reasonable number of
randomly selected Product samples from Tandy's warehouse/distribution
centers and RadioShack stores for testing purposes to verify the
quality of the delivered Products, and Tandy will cooperate with
Digital Convergence in regard to such testing and will provide a
reasonable number of Product samples upon request.
3.6. REPORTS. The Parties shall cooperate with each other in
forecasting demand and inventory needs, and shall provide any information
reasonably requested to estimate current or future manufacturing needs or
distribution needs, or to assess a Product's popularity or penetration in a
given region.
3.7. WARRANTIES OF MANUFACTURE. Tandy will cause the Authorized
Manufacturer to extend to Digital Convergence the warranties of manufacture
typically extended by such manufacturers to Tandy with regard to Tandy's own
products. At a minimum, such warranties will include a warranty of clear title
free and clear of all liens and security interests, a warranty that the :CAT
Products will conform to specifications and be free of defects in material and
workmanship for a period of one hundred twenty (120) days from date of either
Delivery or Tandy Delivery (provided :CAT Products are used in accordance with
the recommendations, instructions, and/or specifications included in the :CAT
Product packaging). Tandy will assist Digital Convergence in presenting warranty
claims to any Authorized Manufacturer.
3.8. DISCLAIMER. THE EXPRESS WARRANTIES SET FORTH IN SECTION 3.7 AND
THE OBLIGATIONS AND LIABILITIES OF TANDY HEREUNDER, ARE IN LIEU OF, AND DIGITAL
CONVERGENCE HEREBY WAIVES, ALL OTHER GUARANTEES AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
3.9. END USER RETURNS. Tandy shall exchange any malfunctioning :CAT
Product distributed by Tandy that is brought by a customer to the store from
which it was distributed. Tandy may require the customer to return the defective
:CAT Product in order to receive a replacement. Digital Convergence shall be
entitled to receive, and Tandy shall provide, a credit on all sums due under
this Agreement for each :CAT Product returned by an end-user within one hundred
twenty (120) days from the date of Delivery due to a defect in workmanship or
materials, or a failure to
8
properly operate, provided that the total number of such returned products
exceeds three (3%) of the applicable Order (as measured by the number of
returned :CAT Products during a twelve (12)-month period compared to the total
number of :CAT Products distributed by Tandy during the same period).
3.10. PROTOTYPES. Before authorizing an initial manufacturing run, or
any manufacturing run involving a change in the specifications or manufacturing
process, Tandy shall produce, or shall cause an Authorized Manufacturer to
produce, a reasonable number of prototype :CAT Products consistent with its
practices for its RadioShack division and shall provide them to Digital
Convergence for testing, analysis and other reasonable purposes. Additionally,
Tandy shall produce, or shall cause the Authorized Manufacturer to produce, and
provide a similar number of prototypes as reasonably requested by Digital
Convergence each time the manufacturing process is changed or updated.
3.11. LARGE SCALE FAILURES. If a :CAT Product fails at rates higher
than three percent (3%) of any Order, (a "Large Scale Failure") whether
discovered in factory testing, Digital Convergence testing, Tandy testing, or
through end-user complaints, the Parties shall work promptly and diligently to
determine the cause of the failures. Digital Convergence shall be entitled to
and Tandy shall pay a refund for all :CAT Products involved in a Large Scale
Failure. If the cause of the Large Scale Failure is defects in material,
workmanship or failure to conform to specifications, as between the Parties
hereto, Tandy shall be responsible for all costs associated with investigating
and correcting a Large Scale Failure. If the cause of the Large Scale Failure is
the specifications or a design approved by Digital Convergence, Digital
Convergence shall be responsible for all costs associated with investigating and
correcting a Large Scale Failure. If the Parties do not promptly determine and
correct the cause of a Large Scale Failure, Digital Convergence may exercise its
Second Sourcing rights set out in, and subject to, Section 3.12 below.
3.12. SECOND SOURCING. At any time after Delivery of the first two (2)
million units of :CAT Products, or should a need for a Second Source arise
pursuant to Section 12.6 ("Delays"), Section 3.11 ("Large Scale Failures"), or
Tandy's rejection of an Order due to the inability of an Authorized Manufacturer
to fill the Order pursuant to Section 3.4(c) ("Order Rejection"), Tandy agrees
that Digital Convergence may purchase :CAT Products from manufacturers other
than those Authorized Manufacturers utilized by Tandy to perform its services
under this Agreement (collectively "Second Sources"), provided that: (i) Digital
Convergence has paid all invoices properly and currently due (including costs
and work in progress); and (ii) Digital Convergence provides sixty (60) days
prior written notice to Tandy that Digital Convergence intends to purchase :CAT
Products from Second Sources. The decision by Digital Convergence to Second
Source :CAT Products shall be made in good faith, and Digital Convergence shall
deal fairly with Tandy in all Second Source situations. Digital Convergence
shall not deal directly with any Authorized Manufacturer without the prior
written consent of Tandy. Should Digital Convergence decide to obtain a Second
Source for reasons of cost reduction, Digital Convergence shall provide Tandy
not less than ten (10) business days within which to meet any lower quotes or
pricing obtained from any such Second Source.
9
4. MARKETING AND DISTRIBUTION
4.1. MARKETING AND DISTRIBUTION MANAGER[S]. Tandy agrees to identify a
marketing and a distribution manager (which may be the same person) to be the
primary point[s] of contact for Digital Convergence for marketing and
distribution issues. The identified marketing and distribution manager[s] shall
be authorized to act for Tandy, and shall be knowledgeable in the areas of the
marketing and distribution. The identified marketing and distribution manager[s]
should oversee all marketing and distribution operations involving or related to
the Products distributed through Tandy's outlets.
4.2. DISTRIBUTION. Tandy shall use its best efforts to stock the
Products at its company owned RadioShack stores, and to encourage dealers to
stock the Products at their RadioShack stores during the term hereof and in
accordance with the deployment schedule agreed to by the parties hereto. Tandy
shall provide nationwide distribution of Products according to the promotional
criteria reasonably established by Digital Convergence. The Parties will agree
on the methods and manner of distributing the Initial Deployment of Products for
distribution to end-users by Tandy owned and associated retail outlets including
XxxxxXxxxx.xxx. Digital Convergence may also distribute the Products through
retail and non-retail channels of distribution but may not directly distribute
the :CAT Product through the outlets listed on Exhibit C unless Tandy has
consented in writing. Nothing contained in this Agreement shall be construed so
as to limit, restrict, or prohibit Digital Convergence from offering for sale,
manufacture, or distribution the :CAT Product to other parties not identified on
Exhibit C (including manufacturers) who may, in turn, distribute products to
those outlets listed in Exhibit X. Xxxxx warrants and represents that Products
it distributes will be distributed only to end users free and clear of all
liens.
4.3. DEPLOYMENT. Digital Convergence shall provide Tandy with at least
1,000,000 :CAT Products on a scaled basis to be agreed upon by the parties
hereto (the "Initial Deployment") and manufactured pursuant to this Agreement.
Tandy will manage the manufacturing and distribution required to fulfill this
obligation. The parties shall mutually develop subsequent
deployment/distribution plan(s).
4.4. MEDIA. Digital Convergence shall provide Tandy with supplies of
floppy diskettes or CD-ROMs containing the Concerto software in quantities
sufficient to support the staged deployment of :CAT Products. Digital
Convergence may also seek third parties to sponsor additional floppy diskettes
or CD-ROMs for distribution by Tandy in support of the :CAT Products provided
that Tandy consents in writing to act as distributor for such Products, which
consent shall not be unreasonably withheld or delayed.
4.5. PACKAGING. The Parties shall cooperate to determine how Products
should be packaged.
4.6. MARKETING.
10
(a) Digital Convergence may seek third parties to pay for all
or part of Digital Convergence's cost of manufacturing in return for their
participation in marketing campaigns. For example, a food manufacturer may pay
for the manufacture of a Product provided that Tandy will give the Product at no
charge to end users who present a proof of purchase from that manufacturer.
Tandy will participate in marketing campaigns and provide ride along ad support
to third parties that agree to pay for all or part of the cost of manufacturing
a Product provided that Tandy consents in writing to provide such ad and
marketing support to such third party, which consent shall not be unreasonably
withheld or delayed.
(b) The parties agree to cooperate to create new marketing
efforts related to the Products.
(c) Tandy will use commercially reasonable efforts to assist
Digital Convergence in meeting with and establishing business relationships with
key Tandy partners and resources.
(d) Digital Convergence will use commercially reasonable
efforts to provide Tandy with one-click online access to XxxxxXxxxx.xxx.
(e) Digital Convergence will provide on a monthly basis a copy
of the initial customer profile to Tandy for any customer from whom Tandy
collects profile information and sends the profile information to Digital
Convergence.
4.7. SALES INCENTIVES. Tandy agrees to permit Digital Convergence to
establish and fund sales incentives for Tandy Sales Associates, subject to
Tandy's approval, which shall not be unreasonably withheld or delayed, including
without limitation financial or gift incentive programs based upon various
deployment criteria. Tandy will administer all such programs.
4.8. ADVERTISING.
(a) Tandy shall support and promote the Products through
unilateral expenditures from is established advertising budgets for its
RadioShack division, including but not limited to RadioShack catalogs, flyers,
inserts, direct mail pieces, television and radio, and XxxxxXxxxx.xxx. Also,
during the term of the Agreement, Tandy's RadioShack division shall tag Digital
Convergence in ads using its corporate name, logo, service xxxx, or its Product
marks in combination with the RadioShack service xxxx, as deemed appropriate
solely in the discretion of Tandy on a space available basis, in all broadcast,
print or electronic media advertising which directs consumers to RadioShack
retail outlets where the Products are available for distribution. Tandy agrees
to properly attribute Digital Convergence's trademarks as registered or owned
trademarks of Digital Convergence, as appropriate, or as directed by Digital
Convergence in writing. Tandy further agrees that, except with respect to
materials substantially identical to materials that have previously been
approved, it will furnish to Digital Convergence for approval of trademark usage
of the Digital Convergence marks a sample of each use of a xxxx that is
different from previously approved usages on advertising, promotional materials,
packaging, and labels. If such use is not approved, Digital
11
Convergence shall correct the trademark usage on the sample, and return it to
Tandy. Tandy will amend its use as instructed. Tandy will use all commercially
reasonable efforts to provide Digital Convergence adequate review and approval
time. Digital Convergence will use all commercially reasonable efforts to
review, approve and return samples in sufficient time to allow production
changes. The Parties will cooperate to develop, at Digital Convergence's cost,
posters and other in-store, point of sale promotional materials which Tandy will
cause to be displayed prominently in Tandy-owned RadioShack stores, and request
to be displayed in dealer stores.
(b) Digital Convergence will promote the Products and Tandy
through advertising as follows: (i) as Digital Convergence deems it to be
feasible, Digital Convergence will tag RadioShack stores in television marketing
efforts conducted by Digital Convergence as a place to obtain :CATS; (ii) as
Digital Convergence deems it to be feasible, Digital Convergence will mention
Tandy or RadioShack in public relations efforts, as a place to obtain :CATS;
(iii) Digital Convergence will tag Tandy and mutually agreed Tandy campaigns
within Digital Convergence's nationwide long form advertisements; and (iv)
Digital Convergence shall provide a reasonable number of posters to Tandy for
display in RadioShack locations.
(c) The Parties will cooperate to develop additional marketing
campaigns.
4.9. END USER LICENSE. Digital Convergence shall provide Tandy with an
end-user license to be included in or on the packaging for the Products. Tandy
will only distribute Products to end users.
4.10. IMPORT. Tandy will xxxx :CAT Products and packaging and certify
them in accordance with the laws and requirements of the country in which the
:CAT Products are manufactured and the country to which the :CAT Products are
shipped.
5. SERVICES WARRANTY
5.1. SERVICES. Tandy warrants and represents that it will
perform its services and obligations under this Agreement in a good and
workmanlike manner.
6. TRAINING
6.1. TRAINING PROGRAM DEVELOPMENT. Digital Convergence shall at its
sole cost and expense write, produce, edit and master a video program which will
familiarize end users with the installation and operation of the Product[s] and
with the features and functions of the Product[s] (a "Customer Training Video").
Tandy shall participate in, review, and approve the Customer Training Video.
Additionally, Digital Convergence shall write, produce, edit and master a video
program which will familiarize Tandy employees with the installation and
operation of the Product and with the features and functions of the Product, and
prepare them to assist end users (an "Employee Training Video"). Tandy shall
participate in, review, and approve the Employee Training Video.
12
Digital Convergence shall deliver to Tandy copies of the Customer Training Video
and the Employee Training Video in quantities sufficient to support the staged
deployment of Products.
6.2. TRAINING PROGRAM DISSEMINATION. Immediately after receiving
copies of the Customer Training Video, Tandy shall provide a copy of the
Customer Training Video to each Radio Shack store in accordance with the
training program and deployment schedule developed by the parties. Tandy
shall broadcast the Employee Training Video on the Tandy Satellite Training
Network. The Parties will cooperate and work together in good faith to
develop an effective training program and schedule which utilizes both the
Customer Training Video and the Employee Training Video.
7. PAYMENT AND CONSIDERATION
7.1. PRICING. The price to be paid by Digital Convergence to Tandy for
its services hereunder will be based on pre-Order quotes supplied by Tandy and
will be Tandy's delivered cost, calculated by A&A in the same manner as for the
RadioShack division of Tandy, but which will include a ten percent (10%) xxxx up
for A&A's services, plus any tooling costs not included in the delivered cost.
All pre-Order quotes will be based on shipment of Product Orders by sea, unless
Digital Convergence specifies shipment by air. In that event, Digital
Convergence will bear the difference in cost.
7.2. EXPORT AND IMPORT FEES. The prices to be paid by Digital
Convergence for Products as set forth in this Agreement will include fees for
any domestic or foreign forwarding agent, consular invoices, and for any of the
documents required by the country of destination. The parties will cooperate to
obtain all required import licenses, permits or other governmental orders and
Tandy will notify Digital Convergence of the cost thereof
7.3. PAYMENT. All Orders shay be pre-paid or accompanied by a
confirmed, irrevocable, documentary letter of credit ("L/C") in the amount of
the total Order price (including estimated fees and commissions) estimated by
Tandy, issued by a U.S. banking institution acceptable to Tandy, and in form and
substance acceptable to Tandy. Upon verifiable proof the L/C has been properly
arranged for, A&A will place the Order with the Authorized Manufacturer. At a
minimum, each L/C shall: (i) be valid until the date of Delivery; (ii) specify
A&A International, Inc., 000 Xxxxxxxxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx as the
beneficiary; (iii) provide for payment to A&A in United States dollars; and (iv)
provide for payment to A&A upon the delivery of an original letter (or telecopy
or fax thereof ) signed by the Controller of A&A or any Vice President of A&A,
which provides: [A] the L/C number; [B] the U.S. dollar amount being drawn; and
[C] a certification that the drawing is pursuant to an Order issued by Digital
Convergence and that manufacturing has been completed. No other documentation
shall be required. The Parties may modify these procedures by written agreement,
signed by authorized officers of A&A or Tandy. Any L/C shortfall will be billed
to Digital Convergence and all such invoices will be due and payable within
thirty (30) days from the date of the invoice.
13
7.4. OTHER CONSIDERATION. The Parties agree that as additional
consideration, Tandy is receiving the marketing and advertising services
provided by Digital Convergence under this Agreement, and Digital Convergence is
receiving the marketing, advertising and distribution services provided by Tandy
under this Agreement. Each party shall account for the value of its respective
services and provide such valuation to the other party within a reasonable time
after the execution of this Agreement.
8. AUDIT
8.1. RECORDS OF TANDY. Tandy shall maintain all records necessary to
demonstrate its performance under this Agreement, including without limitation,
shipping records, materials invoices, store records, and defect and testing
records. Digital Convergence shall have the right to audit Tandy's records,
during normal business hours, no more than semi-annually. Should any audit
reveal that Digital Convergence was overcharged by Xxxxx, Xxxxx shall refund the
amount of any overcharge, and pay all of Digital Convergence's reasonable and
necessary costs incurred in performing the audit.
8.2. RECORDS OF DIGITAL CONVERGENCE. Digital Convergence shall maintain
all records necessary to demonstrate its performance under this Agreement. Tandy
shall have the right to audit Digital Convergence's records, during normal
business hours, no more than semi-annually.
9. TERM AND TERMINATION
9.1. TERM OF AGREEMENT. The initial term of this Agreement shall be
from the Effective Date until December 31, 2001 (the "Initial Term") and will
automatically renew for successive one (1) year terms unless written notice of
nonrenewal is given by either Party at least ninety (90) days prior to the end
of the Initial Term or any successive term. Notwithstanding the foregoing,
however, either party may terminate this Agreement at any time after the
expiration of the Initial Term by providing not less than ninety (90) days
notice thereof to the other party.
9.2. TERMINATION. Additionally, without prejudice to any other rights
or remedies at law, equity, or otherwise of the Party so terminating, a Party
(the "Terminating Party") may terminate this Agreement by giving a notice to the
other Party (the "Defaulting Party"): (i) if at any time, the Defaulting Party
commits a material breach of this Agreement and fails to remedy same to the
Terminating Party's satisfaction within thirty (30) days after delivery of
notice by Terminating Party of the occurrence or existence of such breach; or
(ii) if the Defaulting Party applies for or consents to the appointment of a
receiver, trustee, or liquidator for substantially all of its assets or such a
receiver, trustee, or liquidator is appointed; or the Defaulting Party has filed
against it an involuntary petition of bankruptcy that has not been dismissed
within thirty (30) days thereof, or files a voluntary petition of bankruptcy, or
a petition or answer seeking reorganization, or an arrangement with creditors,
or seeks to take advantage of any other law relating to relief of debtors, or
makes an assignment for the benefit of creditors.
14
10. LIMITATIONS OF LIABILITY
10.1. LIMITATIONS FOR DIGITAL CONVERGENCE. WITH THE EXCEPTION OF
CLAIMS MADE UNDER SECTION 2.6 ABOVE, DIGITAL CONVERGENCE SHALL NOT BE LIABLE
OR OBLIGATED FOR ANY REASON IN ANY MANNER FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE, INDIRECT OR TORT DAMAGES, INCLUDING, WITHOUT
LIMITATION, ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF
PROFITS OR LOSS OF BUSINESS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, THE PERFORMANCE OR NON-PERFORMANCE OR NON-AVAILABILITY OF THE
DIGITAL CONVERGENCE TECHNOLOGY, OR OF ANY OTHER OBLIGATIONS RELATING TO THIS
AGREEMENT, WHETHER OR NOT DIGITAL CONVERGENCE HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. DIGITAL CONVERGENCE SHALL NOT BE LIABLE OR
OBLIGATED IN ANY MANNER TO TANDY FOR ANY AMOUNT IN EXCESS OF THE PAYMENTS
ACTUALLY MADE TO TANDY FOR THE TWELVE (12) MONTHS PRIOR TO A CLAIM RELATED TO
THIS AGREEMENT. THIS LIMITATION OF DIGITAL CONVERGENCE'S LIABILITY IS
CUMULATIVE, AND ALL OF DIGITAL CONVERGENCE'S REASONABLE EXPENDITURES ON
ACCOUNT OF ANY LIABILITY OR OBLIGATION TO TANDY ARISING UNDER THIS AGREEMENT
SHALL BE ADDED TO DETERMINE WHEN THIS LIMITATION ON DIGITAL CONVERGENCE'S
LIABILITY IS EXHAUSTED.
10.2. LIMITATIONS FOR TANDY. WITH THE SOLE EXCEPTION OF CLAIMS BASED
UPON MISAPPROPRIATION OF INTELLECTUAL PROPERTY BY TANDY OR BY AN AUTHORIZED
MANUFACTURER (THE "EXCEPTION"), AND NOTWITHSTANDING ANY PROVISION CONTAINED
HEREIN TO THE CONTRARY, THE MAXIMUM LIABILITY OF TANDY TO DIGITAL CONVERGENCE
ARISING OUT OF OR IN CONNECTION WITH ANY SALE, USE OR OTHER EMPLOYMENT OF ANY
PRODUCTS DELIVERED HEREUNDER OR ANY OTHER OBLIGATIONS RELATING TO THIS
AGREEMENT, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT,
WARRANTY, TORT OR OTHERWISE, SHALL NOT EXCEED THE ACTUAL AMOUNT PAID TO TANDY BY
DIGITAL CONVERGENCE FOR THE SUBJECT UNITS OF PRODUCTS DELIVERED HEREUNDER.
DIGITAL CONVERGENCE AGREES THAT IN NO EVENT OTHER THAN THE EXCEPTION SHALL TANDY
BE LIABLE FOR ANY INDIRECT, SPECIAL, TORT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
10.3. AGREED ALLOCATIONS OF RISK. The Parties agree that the foregoing
are freely bargained for allocations of risk.
11. CONFIDENTIAL INFORMATION
11.1. DISCLOSURE AND USE LIMITATIONS. Each Party shall maintain in
confidence all Confidential Information received from the other Party, shall use
such Confidential Information only as expressly contemplated by this Agreement,
and shall not disclose any such Confidential
15
Information to a third party, or use or duplicate any Confidential
Information, except as expressly permitted hereunder or make any unauthorized
use thereof. Each Party will limit the disclosure of Confidential Information
to those of its employees who have a need to access such Confidential
Information for that Party's performance of this Agreement. Each Party shall
treat such Confidential Information with the same degree of care against
disclosure or unauthorized use which it affords to its own information of a
similar nature. Notwithstanding the foregoing, Tandy may disclose Digital
Convergence Confidential Information to Authorized Manufacturers as necessary
to accomplish the manufacture of the :CAT Products, provided that Tandy
imposes the same duties of confidentiality upon such Authorized Manufacturers
as Tandy has under this Agreement. Tandy shall obtain a non- disclosure
agreement (a sample of which is attached hereto as Exhibit D) from, and
executed by, each Authorized Manufacturer and shall provide a copy thereof to
Digital Convergence.
11.2. SUBPOENA PROCEDURE. In the event the Receiving Party receives a
subpoena or other validly issued administrative or judicial process requesting
any portion of the Confidential Information of the Disclosing Party, the
Receiving Party shall promptly notify the Disclosing Party and tender to it
defense of such demand. Unless the demand shall have been timely limited,
quashed or extended, the Receiving Party shall thereafter be entitled to comply
with such subpoena or other process to the extent permitted by law. If requested
by the Disclosing Party to whom the defense has been tendered, the Receiving
Party shall cooperate (at the expense of the Disclosing Party) in the defense of
a demand.
11.3. REMEDIES. The Receiving Party agrees that the unauthorized
disclosure or use of the Disclosing Party's Confidential Information may cause
irreparable harm and significant and immeasurable injury. Accordingly, the
Receiving Party agrees that the Disclosing Party shall have the right to seek an
injunction against any breach of this Section 11.
11.4. RETURN OR DESTRUCTION OF MATERIALS. Except as otherwise stated
herein, upon termination of this Agreement at the Disclosing Party's request,
the Receiving Party shall, at the Receiving Party's option, either: (i) return
to the Disclosing Party all copies of the Disclosing Party's Confidential
Information in tangible (including electronic) form; or (ii) destroy all copies
of Disclosing Party's Confidential Information in tangible (including
electronic) form which are not returned, and certify to the Disclosing Party
that all such copies of such Confidential Information have been destroyed. The
foregoing notwithstanding, Confidential Information shall remain so for a period
of one (1) year after termination or expiration of this Agreement or any renewal
thereof.
[Remainder of page intentionally left blank.]
16
12. MISCELLANEOUS
12.1. NOTICE GENERALLY. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Agreement shall be sufficiently given or made if in
writing and either faxed, delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to Digital Convergence:
Digital Xxxxxxxxxxx.Xxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
and and
Xxxxxx & Xxxxxx L.L.P. Xxxxxxx Xxxxx, Esq.
3700 Xxxxxxxx Xxxx Center Kane, Russell, Xxxxxxx & Xxxxx
0000 Xxxx Xxxxxx 0000 Xxx Xxxxxx,
Xxxxxx, Xxxxx 00000-0000 Suite 3700
Attention: Xxxxxxx Xxxxxxx Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
(b) If to Tandy: and
Tandy Corporation A&A International, Inc.
000 Xxxxxxxxxxxx Xxxxxx, 000 Xxxxxxxxxxxx Xxxxxx,
Xxxxx 0000 Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000 Xxxx Xxxxx Xxxxx 00000
Attn.: General Counsel Attn.: Controller
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three (3) business days after the same
shall have been deposited in the United States mail.
12.2. ASSIGNMENT. The licenses granted under this Agreement are
personal to Tandy and may not be assigned without the written consent of Digital
Convergence.
17
12.3. HEADINGS. The section or other headings herein are inserted only
for convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement. Unless
otherwise stated, references to Sections herein are references to Sections
hereof.
12.4. GOVERNING LAW; VENUE; LIMITATIONS. This Agreement and the rights
and obligations of the Parties hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without reference to its
provisions on conflict of laws. Texas is the exclusive venue if the action
includes a claim arising out of or relating to this Agreement or the use of the
Product. All payments to Tandy hereunder shall be made in Fort Worth, Tarrant
County, Texas and all disputes hereunder shall be resolved in the applicable
state or federal courts located in Tarrant County, Texas. Any and all claims
hereunder shall be raised within one (1) year of the event or occurrence from
which they arise.
12.5. COSTS. If either Party must bring suit to enforce or preserve its
rights under this Agreement, the Party prevailing in such suit shall be entitled
to all costs and expenses related to such enforcement, including, but not
limited to, reasonable attorneys' fees.
12.6. DELAYS. Neither Party shall be liable to the other Party for any
delay or failure to perform under this Agreement due to causes beyond the
reasonable control of the nonperforming Party. Should such delay occur, the date
or dates for performance shall be extended for a period equal to the number of
days during which performance is so delayed. Notwithstanding the foregoing, if
the Delivery of any :CAT Product is delayed for more than sixty (60) days due to
any cause beyond the control of Digital Convergence but within the control of
Tandy or the Authorized Manufacturer, Digital Convergence may cancel its Order
for the delayed :CAT Product by giving written notice to Tandy of such
cancellation at any time prior to Delivery thereof, and may exercise its Second
Sourcing rights set out in, and subject to, Section 3.12 in lieu of any and all
other remedies. Such cancellation will be without penalty if the cause of the
delay was within Tandy's or the Authorized Manufacturers' control. Otherwise,
the Parties will cooperate in good faith to reasonably apportion the costs of
cancellation among Tandy, Digital Convergence and the Authorized Manufacturer.
12.7. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If the application of any provision of this Agreement to any
particular facts or circumstances shall be held to be invalid or unenforceable
by a court of competent jurisdiction, then: (i) the validity and enforceability
of such provision as applied to any other particular facts or circumstances and
the validity of other provisions of this Agreement shall not in any way be
affected or impaired thereby; and (ii) such provision shall be enforced to the
maximum extent possible so as to effect the intent of the Parties and shall be
reformed without further action by the Parties to the extent necessary to make
such provision valid and enforceable while preserving the original intent of the
Parties.
18
12.8. WAIVER. The waiver by either Party of a breach of or a default
under any provision of this Agreement shall be in writing and shall not be
construed as a waiver of any subsequent breach of or default under the same
or any other provision of this Agreement, nor shall any delay or omission on
the part of either Party to exercise or avail itself of any right or remedy
that it has or may have hereunder or by law or at equity operate as a waiver
of any right or remedy.
12.9. ENTIRE AGREEMENT. This Agreement together with the Exhibits
hereto constitutes the entire agreement between the Parties pertaining to the
subject matter hereof and supersedes all previous communications, agreements,
and understandings between the Parties relating to the subject matter hereof.
Neither Party has entered into this Agreement in reliance upon any
representation, warranty, or undertaking of the other Party that is not set out
or referred to in this Agreement. No amendment or modification of any provision
of this Agreement shall be effective unless in writing and signed by a duly
authorized representative of each Party.
12.10. APPROVALS AND CONSENTS. Except as expressly provided otherwise
in this Agreement, where agreement, approval, acceptance, or consent by either
Party is required by any provision of this Agreement, that action will not be
unreasonably delayed or withheld.
12.11. FURTHER ASSURANCES. Each Party will, at the other's request,
enter into additional agreements or assignments, or will obtain other
documentation as is reasonably necessary to give effect to this Agreement.
12.12. REPRESENTATION OF COUNSEL; MUTUAL NEGOTIATION. Each Party
acknowledges it has had the opportunity to be represented by counsel of its
choice in negotiating this Agreement. This Agreement will therefore be deemed to
have been negotiated and prepared at the joint request, direction, and
construction of the Parties, at arms length, with the advice and participation
of counsel, and will be interpreted in accordance with its terms without favor
to any Party.
12.13. SUPREMACY OF CONTRACT. If there is any conflict between the
terms and conditions of this Agreement and any Exhibit, Schedule, addendum, or
document incorporated by reference in this Agreement, the body of this Agreement
will control.
12.14. MEDIA RELEASES. The Parties shall cooperate with each other to
prepare a mutually acceptable press release with regard to the announcement of
this Agreement.
12.15. NO PARTNERSHIP. The sole relationship between the Parties shall
be that of independent contractors. Nothing herein shall be construed to
constitute the Parties as partners, joint venturers, or agents of each other in
any way whatsoever. Neither Party shall make any warranties or representations,
or assume or create any obligations, on the other Party's behalf. Each Party
shall be solely responsible for the actions of its respective employees, agents,
and representatives.
19
12.16. WIRELESS CONCERTO. The Parties agree to work together in good
faith to determine if it is feasible to market a wireless Concerto product. If
the Parties determine that it is feasible, they may enter into a separate
agreement related to the manufacturing and marketing of such a product.
12.17. PREMIUM PRODUCT. The Parties agree to work together in good
faith to determine if it is feasible to market a "premium" :CAT Product. If the
Parties determine that it is feasible, they may enter into a separate agreement
related to the manufacturing and marketing of such a product.
12.18. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
on and shall inure to the benefit of the parties hereto, their successors,
administrators, heirs and assigns.
12.19. SALES, USE, PROPERTY TAXES. All liability for sales/use taxes or
property taxes due or claimed due as a result of the distribution of the
Products to end-users (if any) shall be the responsibility of Digital
Convergence.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed.
TANDY CORPORATION XXXXXXXXXXXXXXXXXX.XXX INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ J. Xxxxx Xxxxxxx
----------------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxxxx, Name: J. Xxxxx Xxxxxxx,
Title: Senior Vice President Title: Chief Executive Officer
A&A INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxxx,
Title: President
20
