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EXHIBIT 10.17
VISIO CORPORATION DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is entered into as of September 25,
1996 by and between Visio Corporation, having its principal place of business at
000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000, XXX, and its
affiliates including but not limited to Visio International, Ltd. (collectively
referred to as "Visio"), and ASCII Something Good Corporation, a corporation
organized under the laws of Japan, having its principal place of business at
00-0 Xxxx-Xxxxxx 0 xxxxx, Xxxxxxxxx-xx, Xxxxx, Xxxxx and its affiliates
("Distributor").
Visio is engaged in the design, manufacture, distribution, sale and
licensing of the Products and has the right to appoint distributors thereof, and
Distributor desires to act as a distributor appointed by Visio in the Territory.
In consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:
1. DEFINITIONS
For the purpose of this Agreement, the following terms shall have the
following meanings:
(a) "ASCII Add-ons" shall include, but not be limited to, shapes,
program behavior of shapes, graphic styles, and any component
software (i) that interfaces with the Product and graphic styles
that are developed and owned by Distributor and (ii) that are
distributed as a stand-alone product.
(b) "Customers" shall mean end users, resellers, and sub-distributors
of the Products and the Visio Add-ons in the Territory.
(c) "Price Schedule" shall mean the schedule set forth in Exhibit A
attached hereto and incorporated herein, as modified, enhanced and
updated from time to time by written mutual consent of the
parties.
(d) "Product(s)" shall mean: (i) those software products developed by
or for Visio for distribution in the Territory and described in
Exhibit B attached hereto and incorporated herein, and such
additional products as the parties may agree in writing from time
to time to add to Exhibit B; (ii) shapes, program behavior of
shapes, graphic styles, and any component software that interfaces
with the Product and graphic styles that are included as part of
the Product; (iii) end user documentation and other instructional
materials regarding use of any of the foregoing products; (iv)
marketing materials, including but not limited to boxes for the
Products and advertising materials; and (v) training, consulting,
and software support services for any of the foregoing products.
(e) "Sell-Through" shall mean the total number of Units of the Product
sold by Distributor to resellers or end users of the Product and
sold by sub-distributors of the Product to resellers or end users
of the Product, net of all returns of the Product.
(f) "Software License Agreement" shall mean the end user license
agreement included in the packaging of the Product by Visio.
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(g) "Third Party Add-ons" shall include, but not be limited to,
shapes, program behavior of shapes, graphic styles, and any
component software that interfaces with the Product(s) owned by
third parties.
(h) "Territory" shall mean Japan.
(i) "Trademark(s)" shall mean any trademarks owned or licensed by
Visio.
(j) "Value Added Functions" shall mean the marketing, sales, customer
services and technical support functions for the Products and
Customers in the Territory.
(k) "Visio Add-ons" shall include, but not be limited to, shapes,
program behavior of shapes, graphic styles, and any component
software (i) that interfaces with the Product(s) that are
developed by or on behalf of Visio or that are acquired from third
parties by or on behalf of Visio and (ii) that Visio, in its sole
discretion, may include as part of the Product or may distribute
as a stand-alone product.
2. APPOINTMENT
(a) Visio hereby appoints Distributor as an exclusive distributor,
excluding direct sales or licensing by Visio, to acquire, market,
distribute and sell the Products and Visio Add-ons in the
Territory until March 31, 1997, and thereafter as a nonexclusive
distributor to acquire, market, distribute and sell the Products
and Visio Add-ons in the Territory, except as set forth in Section
2(e) herein. Distributor shall purchase the Products and Visio
Add-ons for distribution in the Territory only from Visio. Visio
and Distributor acknowledge that Distributor may acquire, market,
distribute and sell Third Party Add-ons. Visio and Distributor
agree that Distributor may market, distribute and sell ASCII
Add-ons; provided, however, that Distributor may not market,
distribute and sell any ASCII Add-ons and Third Party Add-ons to
Customers without Visio's prior written consent. Visio will not
unreasonably withhold its consent and will respond within twenty
(20) days of Distributor's request. Both parties agree that the
list of the end users of the Products and Visio Add-ons are owned
solely by Visio.
(b) Distributor shall have the right (i) to use the Products and Visio
Add-ons solely for demonstration, technical support or customer
service purposes, and (ii) to distribute the Products and Visio
Add-ons and their documentation to Customers on such terms as are
set forth or referred to herein subject to the terms of the
Software License Agreement.
(c) Distributor acknowledges that Visio may discontinue production or
marketing of any Product and Visio Add-ons covered by this
Agreement upon providing Distributor with at least thirty (30)
days advance written notice.
(d) Distributor will continue to distribute directly to its
sub-distributors in the Territory through March 31, 1997.
Notwithstanding Section 2(a)
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herein, on and after April 1, 1997, Visio may distribute the
Products and Visio Add-ons to such distributors in the Territory
as Visio deems appropriate, subject to payments to Distributor of
sales commissions in accordance with Section 7(h) herein.
Distributor agrees that, on and after April 1, 1997, it will
facilitate Visio order processing and fulfillment based on
mutually agreed-upon terms, and that Distributor will manage its
inventory of Products to mutually agreed-upon minimum levels.
(e) Visio hereby agrees that, notwithstanding Section 2(a) herein, on
and after July1, 1997, Distributor will remain an exclusive
distributor, excluding direct sales or licensing by Visio, in the
Territory to acquire, market, distribute and sell, until December
31, 1997, (i) the license packs set forth on Exhibit B attached
hereto and incorporated herein and (ii) volume licenses (defined
as license sales greater than 100 units).
3. SUBDISTRIBUTORS AND OEM TRANSACTIONS
(a) Distributor will continue to distribute the Products to [*].
Additionally, Distributor will begin distribution with [*] after a
channel marketing plan provided by [*] has been expressly approved
by Visio. Such sub-distributors shall continue to be bound by
terms and conditions similar to the terms and conditions hereof,
except those terms and conditions which require Distributor to
provide customer service and technical support. Visio shall have
no obligation to such sub-distributors except as expressly
provided herein. Visio shall allow Distributor to appoint other
sub-distributors in the Territory upon Visio's prior written
approval. Visio will respond within twenty (20) days of
Distributor's request. Visio's approval shall not be unreasonably
withheld.
(b) Visio and Distributor agree that Distributor may enter into
agreements with original equipment manufacturers ("OEM's") as set
forth herein, provided that Distributor shall make payments to
Visio for each OEM transaction, as mutually agreed upon by Visio
and Distributor. Distributor must obtain Visio's prior written
approval before entering into any transaction with an OEM. Visio
and Distributor agree that Visio shall manage the relationship
with Microsoft Corporation and Distributor agrees not to
participate in any interactions with Microsoft Corporation as they
relate to Visio, until notified by Visio.
1. TRADEMARKS AND END USER LIST
(a) Distributor may use during the term of this Agreement the
Trademarks and any Product name and trade name of Visio, provided
that Distributor (i) will use such marks and names only in the
manner specified from time to time by Visio, and (ii) will submit
all items (including existing and proposed sales and marketing
materials) using such names and marks to Visio for its review and
approval before the same is used or disseminated by Distributor.
The appropriate trademark symbol shall be used whenever a Product
name or other trade name or Trademark first is
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mentioned in any advertisement, brochure, or other material
circulated or displayed by Distributor. Distributor recognizes and
acknowledges that the Trademarks and any Product name and trade
name of Visio are the exclusive property of Visio and that
Distributor is not entitled either by implication or otherwise to
any right, title and interest in the Trademarks or trade names. In
addition, Distributor acknowledges that the goodwill associated
with all such names and marks belongs exclusively to Visio and
that all use of such names and marks will inure to the benefit of
Visio.
(b) Distributor may not use the Trademarks in any manner associated
with the ASCII Add-ons. The parties agree to negotiate in good
faith in the event that Distributor desires to license the
Trademarks.
(c) Visio grants to Distributor a royalty-free, non-exclusive license
until June 30, 1997 to use the list of the end users of the
Products and Visio Add-ons provided that Distributor (i) will use
said end user list for the sole purpose of marketing. distributing
and selling the ASCII Add-ons and (ii) has received Visio's prior
written approval to market, distribute and sell such ASCII
Add-ons.
1. PRICES, TERMS OF SALE
(a) Visio and Distributor agree that all versions of any Product will
be manufactured in Ireland by Visio with Distributor's cooperation
to ensure that Products meet Distributor's quality requirements
and delivery schedules. Visio shall invoice Distributor in US
Dollars each time Products are shipped. Prices shall be as set out
in the Price Schedule. Distributor agrees to pay Visio on a Net 30
days basis from the date of invoice.
(b) Prices shall be in accordance with Visio's Product prices as
determined solely by Visio as set forth in the Price Schedule. All
prices are quoted and all payments shall be made in United States
Dollars.
(c) All prices are C.I.F. port of destination Narita Airport which,
for the avoidance of doubt, means that Visio will cover freight
costs to Narita Airport. All prices are exclusive of applicable
sales, use or value added taxes or other taxes, import or export
fees, duties including import clearance charges or tariffs, and
any other taxes, duties or fees of any kind which may be levied in
connection with the transactions covered hereby. Such charges
shall be paid by Distributor. Visio, however, shall be responsible
for all taxes based upon its net income.
(d) In the event that taxes are withheld by Distributor in connection
with any payment hereunder to Visio, Distributor shall obtain the
appropriate withholding certificates and promptly forward them to
Visio so as to enable Visio to file the certificates with its U.S.
income tax return and obtain a foreign tax credit. Distributor
shall remain liable for such taxes until Distributor has provided
Visio with documentation sufficient to
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enable Visio to obtain the U.S. tax credit. Distributor agrees to
indemnify and hold Visio harmless from any encumbrance, fine,
penalty, or other expense which Visio may incur as a result of
Distributor's failure to pay any taxes as required by this
Agreement.
(e) Visio may, in its sole discretion at any time, elect to provide
any Value Added Functions with its own agents or employees.
(f) In each of the three calendar quarters set forth on Exhibit C,
Distributor will receive a marketing rebate (as a performance
incentive) of [*] per unit of a Product sold if the Sell-Through
of a Product listed on Exhibit C is equal to or greater than the
number of units forecast for such Product on Exhibit C. For each
of such calendar quarters, the aggregate marketing rebate shall
not exceed [*] nor shall it be less than [*]. Distributor shall
receive the marketing rebate as set forth in this Section 5(f)
within thirty (30) days of the end of the respective calendar
quarter. Notwithstanding the foregoing, if Distributor fails to
achieve the obligations set forth on Exhibit E for any given
calendar quarter, Distributor shall not be entitled to any
marketing rebate for such calendar quarter.
(g) In each of the three calendar quarters set forth on Exhibit C,
Distributor will receive a sales rebate in addition to the
marketing rebate set forth in Section 5(f) herein (as a
performance incentive) of [*] per unit of a Product sold if the
Sell-Through of a Product listed on Exhibit C is equal to or
greater than the number of units forecast for such Product on
Exhibit C. This sales rebate applies to each individual product
listed. Distributor shall receive the sales rebate as set forth in
this Section 5(g) within thirty (30) days of the end of the
respective calendar quarter.
6. DISTRIBUTOR'S OBLIGATIONS
Distributor shall:
(a) not distribute, without Visio prior written consent, any software
product which competes directly or indirectly with any Product.
The parties agree that software products of Distributor's print
publishing division and that the products listed in Exhibit D, as
may be modified from time to time in writing signed by both
parties, are deemed to be non-competitive with the Products;
(b) achieve the key performance measures set forth in this Agreement;
(c) not make any changes nor additions to the Products without the
prior written approval of Visio;
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(d) not copy, without Visio's prior written consent, any of the
Products' software, manuals or documentation;
(e) not reverse engineer, disassemble, decompile, modify, alter or
change any part of a Product or its packaging;
(f) inform Visio, on a timely basis, of any known business
opportunities involving the Products which Distributor is unable
to pursue;
(g) market and distribute the Products only in the Territory and
refrain from marketing or distributing the Products to any
individual or entity whom Distributor has reason to believe may
market or distribute the Products outside of the Territory.
Distributor shall refer to Visio any inquiries or orders for the
Products received from outside the Territory;
(h) on a quarterly basis, with Visio representatives, review its
progress in meeting the key performance measures as set forth in
this Agreement;
(i) upon Visio's request, assist Visio in preventing, investigating
and prosecuting any unauthorized copying of the Products by
individuals, corporations or other entities. Distributor agrees to
promptly inform Visio of any unauthorized copying or copies which
come to Distributor's attention;
(j) provide Visio with monthly reports in the form requested by Visio
for sales reports, including sales out by customer, report of
inventory on hand, report of returns, report of backlogs, and
cumulative list of registered users;
(k) work towards maintaining a minimum of four (4) weeks inventory
with Distributor and its sub-distributors in Japan, based on
average weekly Sell-Through for the previous five weeks, subject
to Section 2(d) herein;
(l) submit to Visio a monthly 90-day rolling forecast of stock keeping
units ("SKUs") of products which Visio will ship to Distributor on
a monthly basis, based on a firm monthly purchase order;
(m) provide Visio within two (2) business days from the end of each
week with a weekly report, in the form requested by Visio,
including but not limited to the following:
(i) inventory held by Distributor and sub-distributors of the
Product;
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(ii) inventory held by major retailers (such as Softmap and
Loax). In the instance where this information is
unavailable from major retailers, Distributor will provide
best estimates;
(iii) Sell-Through;
(iv) purchases of the Product by Distributor;
(v) purchases of the Product by sub-distributors from
Distributor; and
(vi) purchases of the Product by resellers from
sub-distributors;
(a) provide Visio with monthly reports, in the form requested by
Visio, to be delivered within five (5) business days from the end
of each month as to royalties, customer service and technical
support calls, marketing activities (such as advertising, channel
marketing, product and price promotions), corporate account
licensing activities and customer registrations. Distributor will
provide best estimates of corporate account licensing activities
where this information is unavailable from major retailers;
(b) create, produce and employ advertisements in strict conformity
with the key performance measures set for on Exhibit E attached
hereto and incorporated herein. Distributor expressly acknowledges
that failure to provide advertising in accordance with the media
schedule set forth on Exhibit E constitutes a material breach of
this Agreement;
(c) conduct ongoing public relations activities related to Product
announcements, Product reviews, corporate case studies and the
like. Such activities specifically include interviews and Product
demonstrations with computer and press journalists;
(d) create and execute a mutually agreeable channel marketing plan
each calendar quarter, which plan will include specific channel
communication, promotions, training and merchandising activities
which have been approved in advance by Visio;
(e) organize and conduct the activities included on Exhibit F attached
hereto and incorporated herein related to the launch of Visio
Technical 4.1J in October 1996;
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(f) continue to provide ongoing marketing activities for volume
licenses (defined as license sales greater than 100 units),
including but not limited to devoting personnel to selling to
medium- and large-sized organizations and seeding target accounts
with Visio evaluation kits;
(g) continue providing customer service and technical support as set
forth on Exhibit G attached hereto and incorporated herein at
least through June 30, 1997; and
(h) on or before June 30, 1997, deliver to Visio (i) all artwork and
other work created by Distributor for or on behalf of Visio, (ii)
all details and information relating to Visio product customers,
including but not limited to, for each customer, Visio Customer
Database information, a complete history of technical support
issues, a complete history of customer service issues, and product
purchase and registration information and (iii) all other material
owned by Visio.
1. VISIO'S OBLIGATIONS
Visio shall:
(a) provide Distributor with assistance (either by telephone, telex,
e-mail, or facsimile machine) regarding the installation, use and
maintenance of the Products;
(b) use its best efforts to fill firm orders on the specified delivery
dates;
(c) assist Distributor in technical matters connected with or
otherwise related to Distributor's functions and duties hereunder,
and furnish Distributor with relevant information, as determined
by Visio, for the promotion of the Product;
(d) upon Distributor's request and at Distributor's sole expense,
provide press kits, marketing literature, and such marketing
support materials as are developed by Visio in the ordinary course
of business that, in Visio's discretion, may be useful to
Distributor in carrying out its obligations hereunder;
(e) provide notice of upgrades and identified problems, and technical
letters to Distributor;
(f) upon Distributor's request and at Distributor's sole expense,
provide training of the Products for Distributor's sales,
marketing, technical support, customer service and engineering
functions;
(g) manage all negotiations with Microsoft Corporation; and
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(h) Visio shall pay to Distributor an amount equal to (i) [*] per unit
for all units of Visio v.4.0J sold-through to distributors other
than Distributor during the period from April 1, 1997 through June
30, 1997 (the "Period") and (ii) [*] per unit for all units of
Visio Technical v.4.1J sold-through to distributors other than
Distributor during the Period. Distributor shall receive the
payment as set forth in this Section 7(h) by July 31, 1997.
1. ACCEPTANCE
Distributor shall examine all shipments of Products upon receipt to confirm that
the shipment contains the proper Product quantities and that no damage has
occurred during shipping. Distributor shall be deemed to have accepted a
shipment of Products unless it provides Visio with written notice of rejection
within seven (7) days after receipt of the shipment. Such notice shall specify
in detail any claimed Product quantity deficiencies. All claims for goods
damaged during shipment within Japan shall be made directly to Distributor's
carrier.
9. PRODUCT ORDERS, ORDER CHANGES AND SHIPMENT SCHEDULES
If Distributor places an order for Products that is not in excess of the
projections for Product orders as stated herein, Visio shall ship the Products
in a prompt fashion. If Distributor's order is in excess of such projections,
Distributor must place its orders at least thirty (30) days prior to the
requested shipment date. Each order must include a written shipment schedule
which shall be subject to Visio's approval. Visio will ship the Product for
accepted orders to the address listed in the first paragraph of this Agreement,
or to such other address specified by Distributor and approved in advance by
Visio. Distributor shall place one main monthly order for all products in line
with the forecast as per this Agreement and to support Sell-Through. Distributor
shall also be entitled to make one further order in any given calendar month.
Visio may at its sole discretion accept further orders from Distributor in the
same calendar month.
10. RETURN OF MERCHANDISE
(j) For Products manufactured pursuant to this Agreement, the parties
will use best efforts to establish a mutually agreed upon
verification and credit process for return of Products.
(k) Subject to Section 10(c) herein, Distributor may only return
Products to Visio as follows:
(i) if the Product has not be accepted pursuant to Section 8;
(ii) if the Product is being returned pursuant to any end user
warranty claim pursuant to Section 11; or
(iii) Products as listed in Exhibit B, for which Product updates
have been issued ("Obsolete Product") may be exchanged but
only if:
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Distributor returns the Obsolete Products to Visio within
forty-five (45) days after notification from Visio of the
discontinuance of a Product or the release of a Product
update and such Obsolete Product is exchanged for new
Products on an equivalent value basis. In returning
Obsolete Product, Distributor shall return Product disks to
Visio and destroy all Product documentation. However, if
Visio authorizes Distributor not to return the Obsolete
product, Distributor must destroy all copies of the
Obsolete Product disks and all Obsolete Product
documentation. Visio shall provide notice in writing of
each Product update to Distributor at least ninety (90)
days prior to the shipping date of that Product update.
(a) Distributor shall pay all expenses, including without limitation,
freight, duties and insurance for returned Products.
11. WARRANTY
(k) Limited Warranty
Visio warrants its Products to end users as set out in the written
limited warranty document accompanying each Product. Visio will accept
all Products returned by end users, for failure to meet the written
limited warranty, which are processed by Distributor provided that: (I)
written notice of the end user warranty claim is received by Visio from
Distributor within thirty (30) days of Distributor's receipt of such
claim from the Customer, (ii) after Visio's authorization, the
non-conforming Products are returned by Distributor to Visio, freight
charges prepaid, and (iii) after examination, Visio determines to its
satisfaction that the Products are non-conforming. All replacement
Products are delivered subject to the terms of the Visio limited
product warranty. Distributor's sole remedy and Visio's sole obligation
under this Section 11 shall be, at Visio's sole election, replacement
of the returned Product or issuance of a credit by Visio for the
original purchase price paid therefor by Distributor. THE FOREGOING
LIMITED WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, OR STATUTORY, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, AND OF ALL OTHER OBLIGATIONS OR
LIABILITIES ON VISIO'S PART.
(b) No Other Warranties
Neither Distributor nor any of its employees, agents or
sub-distributors shall have any right to make any other warranties or
promises for the use of the Products which are not contained in the
written warranty document accompanying the Product. Distributor may,
however, make representations and give instructions for the use of the
Product which are contained on the Product label or container, or end
user documentation provided with the manual or Visio product literature
denoted by Visio part number or authorized in writing by Visio.
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(c) No Warranties for Non-Visio Products
Visio makes no warranties as to items distributed under a third party
name, copyright, trademark, or trade name which may be included within
the retail package. Visio makes no warranties as to items distributed
by a third party of a Product sold hereunder. To the extent permitted
by its contract with the supplier of such included item, Visio shall
assign to Distributor any rights that Visio may have under such
supplier's warranty.
12. LIMITATION OF LIABLITY
(l) IN NO EVENT SHALL VISIO BE LIABLE FOR DIRECT, INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER,
INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, USE OF DATA OR OTHER
COMMERCIAL LOSS WHETHER OR NOT VISIO HAS BEEN ADVISED OF T'HE
POSSIBLITY OF SUCH DAMAGES. THIS LIMITATION SHALL APPLY TO ANY
CLAIM OR CAUSE OF ACTION WHETHER IN CONTRACT OR TORT (INCLUDING
NEGLIGENCE), IN LAW OR EQUITY, STRICT PRODUCT LIABILITY OR
OTHERWISE, OR UNDER ANY OTHER THEORY INCLUDING CLAIMS CONCERNING
PATENT, COPYRIGHT OR OTHER PROPRIETARY RIGHTS INFRINGEMENT.
(m) IN ANY EVENT, VISIO'S LIABILITY (I) UNDER ANY PROVISION OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT, OR,
(ii) FOR ANY DAMAGES CAUSED BY A PROGRAM OR DEFECT OR FAILURE IN
ANY PRODUCT, OR (iii) ARISING FROM A COURT OF PROPER JURISDICTION
HOLDING ANY OF THE ABOVE WARRANTIES OR DISCLAIMERS OF WARRANTIES
INVALID, SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY
DISTRIBUTOR TO VISIO PURSUANT TO THIS AGREEMENT. VISIO'S
LIMITATION OF LIABILITY IS CUMULATIVE WITH ALL OF DISTRIBUTOR'S
EXPENDITURES BEING AGGREGATED TO DETERMINE THE SATISFACTION OF THE
LIMIT. DISTRIBUTOR RELEASES VISIO FROM ANY AND ALL OBLIGATION,
LIABILITY, CLAIMS OR DEMANDS IN EXCESS OF THE LIMITATION. THE
PARTIES ACKNOWLEDGE THAT THE OTHER PARTS OF THIS AGREEMENT RELY
UPON THE INCLUSION OF THIS SECTION. THIS SECTION SHALL SURVIVE ANY
TERMINATION OR EXPIRATION OF THIS AGREEMENT.
13. CONFIDENTIALITY
Distributor agrees to retain in confidence and to require all of its employees,
agents and subcontractors to retain in confidence all information identified by
Visio as confidential and all information which by the nature of the
circumstances surrounding its disclosure ought in good faith to be treated as
proprietary and/or confidential. Visio hereby identifies its communications to
Distributor regarding
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non-public information related to Microsoft Corporation as confidential.
Distributor agrees it will make no use of confidential information and know-how
except under the terms and during the existence of this Agreement. Distributor's
obligation to maintain confidential information in confidence shall extend to
the earlier of such time as the information is in the public domain through no
fault of Distributor or ten (10) years following the termination or expiration
of this Agreement. Distributor's confidentiality obligations set forth herein
shall survive any termination or expiration of this Agreement.
14. RIGHT TO AUDIT
During the term of this Agreement, Distributor agrees to keep all usual and
proper records in regard to its distribution and marketing of the Products.
Visio may cause an audit to be made of Distributor's records in order to verify
any statements issued by Distributor and to confirm Distributor's strict
compliance with the terms of this Agreement. Any audit conducted by Visio shall
be conducted during normal business hours in a manner so as to not unreasonably
interfere with Distributor's business. Visio shall pay all costs associated with
such audit unless the audit discloses that Distributor has materially violated
any of the terms of this Agreement, including but not limited to an audit which
reveals that fees paid by Distributor to Visio under Section 5 of this Agreement
for any quarter are less than ninety-five percent (95%) of what should have been
paid by Distributor for such quarter, in which event the costs of such audit
shall be borne entirely by Distributor, in addition to and without limitation of
any right or remedy Visio may have. Prompt payment of any amount found due and
owing Visio, including audit fees and expenses due Visio under this Section 14,
shall be made by Distributor upon demand by Visio.
15. COMPLIANCE WITH LAWS AND GOVERNMENT REGULATIONS
(o) Distributor shall at its own expense obtain and maintain any and
all governmental approvals required in the Territory for the
performance of the terms and conditions of this Agreement.
Distributor warrants and represents that the Products may be
imported into the Territory under the current laws of the
Territory.
(p) Distributor shall provide Visio with copies of any and all
governmental approvals and registrations that it obtains in regard
to this Agreement and the Products.
(q) If any necessary governmental approvals are not or cannot be
obtained within a reasonable time and in a form and substance
satisfactory to Visio, Visio may terminate this Agreement and upon
receipt of notice of termination by Distributor, this Agreement
shall be null, void and of no effect.
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1. RELATIONSHIPS BETWEEN PARTIES
All products supplied to Distributor hereunder shall be purchased by Distributor
for its own account at its own risk and resold only in accordance with the terms
hereof. Visio and Distributor are independent contractors and are not, and shall
not represent themselves as principal and agent or joint venturers. Distributor
shall act as a principal on its own behalf and has no legal power or authority,
expressed or implied, to act for or obligate Visio in any manner.
17. PROPRIETARY RIGHTS
(q) The parties agree not to disclose to any third party any
confidential information concerning the Products or any
information of a confidential nature about Visio. Distributor
acknowledges that Visio retains all copyrights and other
proprietary rights to the Products and Trademarks, and
specifically Distributor obtains only the rights to the Products
specifically granted in Section 2 hereof. Distributor shall not
reverse engineer, nor shall Distributor permit any third party to
reverse engineer, any of the Products.
(r) Distributor shall transfer no Product to a Customer unless (I)
such Product is packaged in such a way that the opening of the
package by the Customer obligates the Customer to comply with
Visio's terms and conditions for sale, or (ii) Distributor shall
have obtained from the Customer prior to such transfer a signed
copy of the Software License Agreement, as such may be amended
from time to time by Visio, signed copies of which, with respect
to each such Customer, shall be furnished to Visio. Upon any
amendment of the Software License Agreement, Visio shall notify
Distributor of such amendment and shall furnish Distributor with a
copy of the amended Software License Agreement.
1. DURATION
This Agreement shall commence upon the execution of this Agreement by both
parties and shall terminate on December 31, 1997, unless earlier terminated by
either party, whereupon all rights and obligations of the parties hereunder
shall cease, except the obligations of Sections 11,12,13,14, 17, 18, 19, 20, and
21(a), (e) and (k) hereof and any other rights or obligations which survive the
termination hereof.
19. TERMINATION
This agreement may be terminated as follows:
(a) (Automatically in the event the other party becomes insolvent or
bankrupt, makes an assignment for the benefit of creditors, ceases
to function as an ongoing concern and conduct its operations in
the normal course of business or has a trustee or receiver
appointed for it.
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14
(b) By Distributor upon written notice to Visio, if Visio has breached
the terms of this Agreement in any material respect and fails to
cure such breach within sixty (60) days after Visio's receipt of
written notice of such default.
(c) By Visio upon written notice to Distributor, in the event
Distributor breaches any of its obligations contained herein,
including without limitation the obligation to meet the key
performance measures as set forth in this Agreement. Termination
for failure to pay any money due hereunder shall be effective ten
(10) days after notice of termination to Distributor, if
Distributor's payment defaults have not then been cured prior to
the end of such ten (10) days. In all other cases, termination
shall be effective thirty (30) days after notice of termination to
Distributor if Distributor's defaults have not then been cured
prior to the end of such thirty (30) days. The rights and remedies
of Visio provided in this Section 19 shall not be exclusive and
are in addition to any other rights and remedies provided by law
or this Agreement.
1. EFFECT OF TERMINATION
Upon any termination or expiration of this Agreement for any reason:
(a) Visio, at its option, may repurchase any or all Products then in
Distributor s possession which are in their original packaging,
undamaged, and are shown on Visio's then current product List, at
a price not greater than the price paid by Distributor for such
Products. Upon receipt of any Products so repurchased from
Distributor, Visio shall issue an appropriate credit to
Distributor's account.
(b) The due date of all outstanding invoices to Distributor for
Products shall automatically be accelerated to become due and
payable by immediate wire transfer on the effective date of
termination, even if longer terms have been previously agreed to.
All orders or portions thereof remaining un-shipped as of the
effective date of termination shall automatically be canceled.
(c) For a period of one (1) year after the date of termination,
Distributor shall make available to Visio for inspection and
copying all books and records of Distributor that pertain to
Distributor's performance under and compliance with its
obligations, warranties and representations under this Agreement.
(d) Distributor shall forthwith cease all use of Trademarks, and will
not use any xxxx which is confusingly similar to any Trademark of
Visio.
(e) Distributor shall return all Visio marketing literature and
materials to Visio.
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15
(f) Neither Visio nor Distributor shall be liable to the other for
damages of any kind, including incidental or consequential damages
on account of the termination of this Agreement for any reason.
(g) Distributor will immediately cease all representations that it is
a Visio Distributor.
(h) Neither party will be entitled to any reimbursement in any amount
for any training, market development, investments or other costs
expended by either party before the termination of this Agreement,
or other payment as an indemnity or compensation for termination,
regardless of the reason for, or method of, termination of this
Agreement.
21. MISCELLANEOUS
(a) Notice
All notices or reports permitted or required under this Agreement
must be in writing and must be delivered by personal delivery,
telegram, facsimile transmission or by certified or registered
mail (or airmail if international), return requested receipt, and
shall be deemed given upon personal delivery, five (5) days after
deposit in the mail, or upon acknowledgment or receipt of
electronic transmission. Notices shall be sent to the address set
forth above or to such other address as either party may specify
in writing. All notices to Visio shall be sent to its President.
(b) Force Majeure
Neither party will be liable hereunder by reason of any failure or
delay in the performance of its obligations hereunder (except for
the payment of money) on account of strikes, shortages, riots,
insurrection, fires, flood, storm, explosions, acts of God, war,
governmental action, labor conditions, earthquakes, or any other
similar cause which is beyond the reasonable control of such
party.
(c) Waiver
The failure of either party to require performance by the other
party of any provision hereof will not affect the full right to
require such performance at any time thereafter nor will the
waiver by either party of a breach of any provision hereof be
taken or held to be a waiver of the provision itself.
(d) Severability
In the event that any provision of this Agreement is found to be
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16
unenforceable or invalid under any applicable law or is so held by
a court of competent jurisdiction, such unenforceability or
invalidity will not render this Agreement unenforceable or invalid
as a whole, and, in such event, such provision will be changed and
interpreted so as to accomplish the objectives of such
unenforceable or invalid provision within the limits of applicable
law or applicable court decision.
(e) Attorneys' Fees; Governing Law
In the event an action is commenced to enforce a party's rights
under this Agreement, the prevailing party in such action shall be
entitled to recover its actual costs and reasonable attorneys'
fees. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Washington, USA, without
reference to its rules relating to choice of law, except to the
extent preempted by the laws of the United States of America which
will then apply, and Distributor hereby consents to venue in and
jurisdiction of the state and federal courts sitting in the State
of Washington, USA. Distributor agrees that any lawsuit arising
hereunder brought by Distributor shall be brought in either the
state or federal courts sitting in King County, State of
Washington, USA. Notwithstanding anything to the contrary in this
Agreement, Visio shall have the right to elect in its sole
discretion the forum for any law suit arising hereunder brought by
Visio.
(f) Headings
The Section headings appearing in the Agreement are inserted only
as a matter of convenience and in no way define, limit, construe
or describe the scope or extent hereof, and in no manner affect
this Agreement.
(g) Amendments
The parties agree that this Agreement may be amended by written
agreement of the parties hereto.
(h) Counterparts
This Agreement may be signed in two (2) or more counterparts, each
of which shall be deemed to be an original, but which together
will form a single Agreement as if both parties had executed the
same document.
(i) Authority
Each party warrants that (I) it has full power and authority to
enter into
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17
and perform its obligations under this Agreement, (ii) this
Agreement has been duly authorized by and is binding and
enforceable upon such party, and (iii) the person signing this
Agreement on that party's behalf has been duly authorized and
empowered to enter into this Agreement.
Each party further acknowledges that it has read this Agreement,
understands it, and agrees to be bound by it.
(j) Approvals
In each case where approvals or consents of either party are
required under this Agreement, such approvals or consents shall
not be unreasonably withheld.
(k) Indemnification
Distributor hereby agrees to defend, indemnify and hold harmless
Visio and its employees, officers and directors from and against
any and all claims, demands, causes of action, damages, losses,
expenses and liabilities (including without limitation, attorneys'
fees, actual litigation costs, and settlement costs) arising out
of or in any way connected with any breach by Distributor of any
of the terms of this Agreement.
(l) Assignment
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns,
except that Distributor may not assign, nor attempt to assign, its
rights or obligations under this Agreement in any way without the
prior written consent of Visio.
(m) Compliance With Anti-Boycott Laws
Distributor shall at all times during the term of this Agreement
comply with U.S. Anti-Boycott laws. Such compliance means, without
limitation, that Distributor shall not provide information, refuse
to do business, require any third parties to refuse to do
business, make or cause third parties to make discriminatory
employment decisions, or knowingly agree to take any of the
foregoing actions, with intent to comply with, further or support
a boycott not sanctioned by the U.S. Government (except as set
forth in 14 C.F.R. Part 769.3). Distributor shall report to Visio
any request that Distributor is required to report to the U.S.
Department of Commerce under 15 C.F.R. Part 769.6, and shall
provide Visio with a copy of any information or document that it
- 17 -
18
submits in response to such a reportable request. Distributor
shall be solely responsible for and shall indemnify, defend, and
hold harmless Visio in connection with any liability and costs
that Distributor or Visio incurs as a result of any violation by
Distributor of U.S. Anti-Boycott laws.
(n) Export of Product
Distributor agrees that it does not intend to and will not
knowingly, without prior written consent, if required, of the
Office of Export Administration of the Xxxxxx Xxxxxx Xxxxxxxxxx xx
Xxxxxxxx, Xxxxxxxxxx X.X. 00000, directly or indirectly, export or
transmit any Product or direct data therefrom to any country that
is subject to U.S. export restrictions (currently including, but
not necessarily limited to, Cuba, Iraq, Libya, Montenegro, Serbia,
and North Korea) and any group Q, S, W, Y, or Z country specified
in Supplement No. l to Section 770 of Export Administration
Regulation issued by the U.S. Department of Commerce or to any
other country to which such export or transmission is restricted
by such regulations or applicable statutes.
(o) Government Licenses
Any Product which Distributor licenses or acquires under this
Agreement for or on behalf of the United States of America, its
agencies, instrumentalities, or agents ("U.S. Government") is
provided to Distributor with RESTRICTED RIGHTS and shall be
provided to the U.S. Government with RESTRICTED RIGHTS. Use,
duplication, or disclosure by the U.S. Government is subject to
restrictions as set forth in subparagraph (C)(l)(ii) of the Rights
in Technical Data and Computer Software clause at XXXXX, 00 C.F.R.
52.227-7013 or subparagraphs (C)(l) and (C)(2) of the Commercial
Computer Software -- Restricted Rights clause at FAR, 48 C.F.R.
52.227-19. Distributor shall comply with any requirements of the
Government to obtain such RESTRICTED RIGHTS.
Contractor/manufacturer is Visio Xxxxxxxxxxx/000 Xxxx Xxxxxx/Xxxxx
0000/Xxxxxxx, Xxxxxxxxxx 00000-0000, XXX.
(p) Entire Agreement
This Agreement (including the Exhibits) sets forth the entire
understanding and agreement of the parties as to the matters
covered hereby. This Agreement supersedes any prior or collateral
agreements, including that certain Distribution Agreement dated as
of January 1, 1995 and amended March 8, 1996 between ASCII
Corporation and
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19
Visio, with respect to the matters covered by this Agreement.
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20
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above. All signed copies of this Agreement shall be deemed
originals.
Visio Corporation ASCII Something Good, Inc.
By /s/ Xxxxx Xxxxxxxx By /s/ Xxxxxxx Xxxxxxxx
-------------------- ---------------------
Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
----------------------- -----------------------
Name (Print) Name (Print
Vice President President
----------------------- -----------------------
Title Title
September 25, 1996 October 3, 1996
----------------------- -----------------------
Date Date
Visio International, Ltd.
By /s/ Xxxxx Xxxxxxxx
---------------------
Xxxxx Xxxxxxxx
-----------------------
Name (Print)
Director
-----------------------
Title
September 25, 1996
-----------------------
Date
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EXHIBIT A
PRICE SCHEDULE
Purchase Price (per unit) from the Effective Date until March 31, 1997
----------------------------------------------------------------------
$ USD
----------------------------------------------------------------------
Visio v4.0J (retail) [*]
----------------------------------------------------------------------
Visio Technical v4.1J (retail) [*]
----------------------------------------------------------------------
Visio Technical v4.1J (upgrade) [*]
----------------------------------------------------------------------
Purchase Price (per unit) from the Effective Date until June 30, 1997
----------------------------------------------------------------------
$ USD
----------------------------------------------------------------------
Visio v4.0J (license) 1, 10, 50 [*]
----------------------------------------------------------------------
Visio v4.0J (license) 100+ [*]
----------------------------------------------------------------------
Visio Technical v4.1J (license) 1, 10, 50 [*]
----------------------------------------------------------------------
Visio Technical v4.1J (license) 100+ [*]
----------------------------------------------------------------------
Purchase Price (per unit) from July 1, 1997 until December 31, 1997
----------------------------------------------------------------------
$ USD
----------------------------------------------------------------------
Visio v4.0J (license) 1, 10, 50 [*]
----------------------------------------------------------------------
Visio v4.0J (license) 100+ [*]
----------------------------------------------------------------------
Visio Technical v4.1J (license) 1, 10, 50 [*]
----------------------------------------------------------------------
Visio Technical v4.1J (license) 100+ [*]
----------------------------------------------------------------------
ASG Distribution Agreement
[*] Confidential Treatment Requested
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22
EXHIBIT B
PRODUCTS
Visio v4.0J (retail)
Visio v4.0J (license) 1, 10, 50
Visio v4.0J (license) 100+
Visio Technical v4.1J (retail)
Visio Technical v4.1J (upgrade)
Visio Technical v4.1J (license) 1, 10, 50
Visio Technical v4.1J (license) 100+
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23
EXHIBIT C
SALES FORECAST
Key performance measures:
Forecast (number of units)
--------------------------------------------------------------------------------------------------------------
Product Quarter ended Quarter ended Quarter ended Totals
December 31, 1996 March 31, 1996 June 30, 1997
--------------------------------------------------------------------------------------------------------------
Visio v4.0J (retail) [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------------
Visio v4.0J (license) [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------------
Visio Technical v4.1J (retail) [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------------
Visio Technical v4.1J (license) [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------------
Visio Technical v4.1J (upgrade) [*] [*]
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Totals [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------------
ASG Distribution Agreement
[*] Confidential Treatment Requested
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EXHIBIT D
NONCOMPETITIVE PRODUCTS
The CARD for Windows. The GRAPH for Windows, CANDY for Windows, VOICE MOUSE,
XXXXX, XXXXXXX, Super JG, Super Kid, Midisoft STUDIO, PC Paintbrush, PHOTO
FINISH, WingZ, CARD PRESS, 3-D PERS for Windows, 3-D PERS, CANDY, The CARD,
Media Room, Music Magic, Presentation Partner, Music Mentor, Sound Impression,
JAM TRAX, Audio Works, Media Browser, Media Works, Softkicker, SMART Sketch,
DESK SONIC, CARD 3+ Graph, Z's STAFF KID, Calendar Creator, Key Note, FUDEOh,
HOHSEI Fit, Letter Express, EIBUN Rescue (English Rescue), Motion Magic,
Stmage, Vmaker, SANKAKU DENDEN, Power++, WinTutor, Internet Rescue, Web Pilot,
Ninja, Ninja Filer
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25
EXHIBIT E
DISTRIBUTOR MARKETING COMMITMENT
Key Performance Measures:
Advertising
Distributor will create, produce, and employ advertisements as follows:
----------------------------------------------------------------------------------------
Advertising Oct. 1996 Nov. 1996 Dec. 1996 Jan. 1997
----------------------------------------------------------------------------------------
Visio v4.0J [*]
----------------------------------------------------------------------------------------
Visio Technical v4.1J [*] [*] [*] [*]
----------------------------------------------------------------------------------------
Visio v4.0J Advertising Media Schedule (number of pages) Sept. 1996 - June 1997
------------------------------------------------------------------------------------------------------
Magazine Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Number
1996 1996 1996 1996 1997 1997 1997 1997 1997 1997 of
Pages
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
Total Pages [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
------------------------------------------------------------------------------------------------------
Visio Technical v4.1J Advertising Media Schedule (number of pages) Sept. 1996 -
June 1997
--------------------------------------------------------------------------------------------------------
Magazine Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Number
1996 1996 1996 1996 1997 1997 1997 1997 1997 1997 of Pages
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
Total Pages [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
Marketing Collateral:
Distributor will create, produce and employ the following marketing collateral:
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
6. [*]
7. [*]
ASG Distribution Agreement
[*] Confidential Treatment Requested
- 25 -
26
EXHIBIT F
VISIO TECHNICAL 4.1J PRODUCT LAUNCH ACTIVITIES
Distributor commits to the following activities related to the launch of Visio
Technical 4.1J in October 1996:
1. Organize and assist Visio with a series of interviews and product
demonstrations with the press, planned for October 14, 15 and 16, 1996.
2. Organize and assist Visio with a series of meetings and product
demonstrations with key distributors including [*] and with resellers
including [*], planned for October 14, 15 and 16, 1996.
3. Create, produce and mail [*] upgrade mailers to the Visio registered user
and Visio prospect base, to be completed by October 31, 1996.
ASG Distribution Agreement
[*] Confidential Treatment Requested
- 26 -
27
EXHIBIT G
CUSTOMER SERVICE AND TECHNICAL SUPPORT ACTIVITIES
Customer Service:
Distributor shall handle the following types of service requests:
1. Replacement product diskettes
2. Product literature
3. Dealer location information
4. Fulfillment of special offers and promotions
5. Tracking customer information requests
6. Maintaining product registrations and the customer database
Technical Support:
Distributor will provide Visio product customers with high quality technical
support via phone and fax to the registered user base. Distributor shall provide
the following to Visio (in both Seattle and Dublin):
1. Customer name and address details on a monthly basis
2. 24-hour response to customer technical support queries
3. Technical support metrics (number of calls, and hold and
abandonment rate) on a monthly basis
4. Customer feedback
Distributor shall track all technical support queries by customer and shall
inform Visio (Dublin) of any issues which could not be resolved.
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