Exhibit 10.3
DISTRIBUTION AGREEMENT
This Agreement is made and entered into as of January 18, 1999 by and
between NetWolves Corporation, a New York corporation ("NetWolves"), and Anicom,
Inc., a Delaware corporation ("Anicom"), both having addresses as set forth on
the signature page of this Agreement.
WITNESSETH:
WHEREAS, NetWolves is engaged in the manufacture, sale and distribution in
the United States of various software and manufactured products;
WHEREAS, Anicom is engaged in the business of distributing various types of
wire, cable and connectivity products;
WHEREAS, Anicom desires to be appointed as an Exclusive Master Distributor
of NetWolves' Products, as hereinafter defined, throughout North America; and
WHEREAS, NetWolves desires to appoint Anicom as an Exclusive Master
Distributor of the Products throughout North America.
NOW, THEREFORE, in consideration of the mutual promises and covenants of
the parties as hereinafter more fully set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
I. DEFINITIONS
1.1 "Anicom Group": Anicom, its subsidiaries and all Anicom Resellers.
1.2 "Anicom Resellers": Those entities identified on Appendix A and such
other entities as Anicom may add to Appendix A from time to time upon NetWolves'
consent, which consent shall not be unreasonably withheld or delayed, provided
that it will not be unreasonable for NetWolves to withhold its consent if the
entity is a direct competitor of NetWolves.
1.3 "Committed Amount": With respect to each Year, and the first six (6)
months of each Year, the Committed Amount for purposes of this Agreement shall
refer to a number of Units determined in accordance with the following:
Committed Amount
Year First 6 Months Full Year
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1 * *
2 * *
3 * *
4 * *
5 * *
provided, however, if (a) the number of Units purchased by the Anicom Group in a
given Year exceeds the Committed Amount for such Year, then the Committed Amount
in subsequent Years shall be reduced, in the aggregate beginning with the next
succeeding year, by the amount of such excess, and (b) if the Anicom Group
orders at least the Committed Amount for a given Year, but NetWolves is unable
to deliver to the Anicom Group within such year the full number of Units ordered
in such Year, then such shortfall shall be credited against the Committed Amount
for the next Year.
1.4 "Distributor": A wholesaler or an entity whose primary business is
selling products competitive with those of Anicom.
1.5 "Effective Date": February 1, 1999.
1.6 "Product": The Foxbox, as described on Appendix B, and any New
Versions, Competitive Products, updates, enhancements, modifications,
replacements or substitutions thereto.
1.7 "Territory": North America.
1.8 "Unit": A unit of Product, regardless of cost.
1.9 "Year": Each twelve month period ending on an anniversary of the
Effective Date. For example, the twelve-month period ending on the first
anniversary of the Effective Date is referred to as the first Year.
II. PURPOSE
The purpose of this Agreement is to promote and achieve the effective sale
of Products within Anicom's assigned Territory. NetWolves and Anicom recognize
the market in which the Products are sold is extremely competitive; that there
are generally competitive products in the marketplace; and that in order for
NetWolves and Anicom to achieve a satisfactory level of sales it is necessary
that Anicom compete effectively in the marketplace.
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* Confidential portions omitted and filed separately with the Commission.
III. APPOINTMENT
3.1 Appointment. NetWolves hereby appoints Anicom as its Exclusive Master
Distributor of Products in the Territory and Anicom hereby accepts the
appointment.
3.2 Nature of Appointment. The appointment is exclusive within the
Territory, and NetWolves shall not appoint any other distributors within the
Territory as long as this Agreement is in full force and effect. In furtherance
of this appointment, NetWolves will clearly identify Anicom as its exclusive
distributor in the Territory on NetWolves' website. Notwithstanding the
foregoing, NetWolves shall have the right to make direct sales or leases of the
Products to customers, Distributors and Anicom Resellers, and NetWolves agrees
to pay Anicom a * commission on any sales or leases made by NetWolves that
Anicom is not involved with in the Territory, and to pay Anicom a * commission
on NETS (NetWolves Enhanced Technical Support) revenues within the Territory,
provided that any such sales or leases to Distributors shall be counted as
orders from Anicom for purposes of Sections 5.3 and 8.2, but otherwise, sales or
leases of Products by NetWolves to other parties, including without limitation,
the * pursuant to an agreement entered into prior to this Agreement, will not be
counted as orders from Anicom for purposes of Section 5.3 and 8.2. Payment of
any commissions to Anicom will be made by NetWolves within forty-five (45) days
of the receipt of funds from such customers. Should NetWolves fail to pay any
commissions when due, Anicom will charge interest on the outstanding commissions
at the lower of 1-1/2% compounded monthly or the maximum rate permitted by law.
3.3 Commercially Reasonable Efforts. During the term of this Agreement,
Anicom shall promote and sell Products within the Territory. However, the Anicom
Group shall not be obligated to purchase any Products at any time hereunder, and
if the Anicom Group fails to order the Committed Amount in any given Year, for
any reason, NetWolves' sole and exclusive remedy shall be as set forth in
Section 5.3.
3.4 Sales to Resellers. NetWolves shall direct all Anicom Resellers to buy
Products from Anicom. In the event an Anicom Reseller elects not to buy from
Anicom, NetWolves will provide Anicom with a written report concerning such
events. In the event an Anicom Reseller elects not to buy from Anicom and
purchases or leases Products from NetWolves, NetWolves agrees to pay to Anicom a
commission on any such sales or leases equal to Anicom's gross profit that it
would have recognized on such sale. As used herein, the term "gross profit"
shall mean an amount equal (i) the amount that Anicom would have charged such
Anicom Reseller based upon its recent sales of similar Products and historical
sales to that Anicom Reseller, minus (ii) Anicom's discounted price from
NetWolves then in effect pursuant to Section 8.2. Payment of the foregoing
amount to Anicom will be made by NetWolves within forty five (45) days of the
receipt of funds from such Anicom Reseller. Should NetWolves fail to pay any
commissions when due, Anicom will charge interest on the outstanding commissions
at the lower of 1-1/2% compounded monthly or the maximum rate permitted by law.
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* Confidential portions omitted and filed separately with the Commission.
IV. NOTIFICATION REGARDING PRODUCT CHANGES
NetWolves shall notify Anicom in writing not less than ninety (90) days
prior to any changes to any of the Products, including without limitation, any
New Versions, updates, modifications, model changes and substitutions. NetWolves
shall also notify Anicom in writing not less than ninety (90) days prior to
adding or deleting a Product.
V. COMMITTED AMOUNTS
5.1 Annual Accounting. Within sixty (60) days after the end of each Year,
NetWolves shall prepare or caused to be prepared and delivered to Anicom a
statement setting forth the actual purchases by the Anicom Group during such
Year, the Committed Amount for such Year, the commissions earned and paid for
such Year, and the bonus discounts earned for such Year (the "Annual
Statement"). If Anicom disagrees with an Annual Statement, Anicom shall notify
NetWolves in writing of such disagreement within thirty (30) days after the date
on which Anicom received the Annual Statement, which written notice shall
specify the nature of the dispute and shall provide in reasonable detail the
facts or circumstances upon which such dispute is based. Thereafter, NetWolves
and Anicom shall attempt in good faith to resolve such disagreement with respect
to the Annual Statement.
5.2 Dispute Resolution. If NetWolves and Anicom are unable to resolve any
disagreement regarding an Annual Statement within twenty (20) days after
NetWolves' receipt of notice of disagreement from Anicom, either NetWolves or
Anicom may give notice (an "Arbitration Notice") to the other party of an intent
to submit such disagreement to a certified independent public accounting firm
that is among the five largest such firms in the United States (the "Independent
Accounting Firm") and mutually agreeable to NetWolves and Anicom. If NetWolves
and Anicom cannot agree upon such election within twenty (20) days after
delivery of the Arbitration Notice, the Independent Accounting Firm shall be
selected by lot from among the five largest independent public accounting firms
in the United States. The dispute shall be immediately submitted by the parties
to the Independent Accounting Firm for resolution of such dispute within twenty
(20) days after submission to the Independent Accounting Firm. At the time of
the submission of such dispute to the Independent Accounting Firm for
resolution, NetWolves shall file with the Independent Accounting Firm a written
statement of its position with regard to any matters in dispute, at which time
Anicom shall have ten (10) days to respond in writing to NetWolves' position.
Upon receipt of written position statements by each of the parties, the
Independent Accounting Firm shall resolve the dispute in accordance with
generally accepted accounting principles, consistently applied. The decision of
the Independent Accounting Firm shall be final and binding upon all parties
hereto. Each party shall bear its own expenses, including expenses of its
accountants and attorneys in connection with the resolution of any such dispute,
and the fees and expenses of the Independent Accounting Firm shall be paid by
the parties as determined by the Independent Accounting Firm.
5.3 Failure to Meet Committed Amount. Notwithstanding Sections 5.1 and 5.2,
in the event the Anicom Group shall fail to order Products from NetWolves
equaling or exceeding the corresponding Committed Amount for any Year, or the
first six months of any Year, other than as a result of NetWolves' failure to
timely fulfil orders placed by Anicom during such Year, NetWolves may, at its
option, take any or all of the following actions:
(a) convert Anicom's Exclusive Master Distributor rights hereunder to
that of a Master Distributor or Distributor in the Company's Reseller Program at
a level based on the number of Units purchased by the Anicom Group in the prior
Year;
(b) elect to terminate this Agreement, provided that notwithstanding
such termination, NetWolves shall continue to sell to Anicom such quantities of
repair parts, supplies, accessories and replacement inventory of any model of
the Products which Anicom may reasonably require to effectuate an orderly
disposal of Anicom's existing inventory of Products as well as continue to
service the Products theretofore sold by Anicom; and
(c) immediately upon written notice to Anicom, stop any and all
override commissions referred to in Section 3.2 and Section 8.2, provided that
NetWolves shall remain obligated to pay any such commissions earned prior to
such notice.
5.4 Committed Amount to be Renegotiated. In the event that this Agreement
shall be extended beyond its original five (5) year term, the parties hereto
shall jointly agree upon a new Committed Amount for each subsequent Year hereof,
and the same shall be endorsed by the parties and made a part of this Agreement,
failing which the Agreement shall not be renewed.
VI. NETWOLVES' OBLIGATIONS
6.1 Instruction Manuals. NetWolves shall provide to Anicom reasonable
quantities of instruction manuals as well as catalogues, circulars and other
printed or electronic media material which it may have on hand and which are or
may be useful to Anicom in the conduct of sales of the Products.
6.2 Advertising Materials. NetWolves shall furnish to Anicom in such
amounts as NetWolves and Anicom reasonably deem necessary, for a minimal
handling fee as NetWolves shall determine, such advertising aids which NetWolves
may have from time to time and which Anicom may use in advertising and
promotional campaigns for the Products. Anicom may adapt, translate, reproduce
and distribute such advertising aids as Anicom deems appropriate or necessary
with NetWolves' prior written consent, which consent will not be unreasonably
withheld or delayed.
6.3 Access to NetWolves' Employees. NetWolves agrees to provide reasonable
access to its Internet Sales Consultants to assist Anicom in selling Products.
6.4 Warranties and Representations of NetWolves. NetWolves represents and
warrants that (a) it is a corporation duly organized and existing and in good
standing under and by virtue of the laws of the state set forth on the title
page hereof; (b) it has the corporate power and authority to enter into this
Agreement and to conduct its business as currently conducted and as contemplated
hereunder; (c) the signatory to this Agreement for NetWolves has the power and
authority to bind NetWolves; (d) NetWolves owns or has the right to use all
patents, patent rights, copyrights, trade secrets and other proprietary rights
in or to the Products; (e) to the Company's knowledge, the Products do not
infringe any patent, copyright, trade secret or other proprietary right owned by
a third person; (f) NetWolves' execution and performance of this Agreement will
not violate any other agreement or obligation by which NetWolves may be bound;
(g) NetWolves will be entitled to exercise its rights under this Agreement, free
of any attribution, accounting or consent obligation, except as otherwise
specified herein; (h) to the Company's knowledge, the occurrence in or use of
dates on or after January 1, 2000, including leap year calculations (the
"Millennial Dates") will not adversely affect the performance of the Products
with respect to date dependent data, computations, output or other functions
(including, without limitation, calculating, computing and sequencing) and the
Products will create, sort and generate output data related to or including
Millennial Dates without errors or omissions; and (i) the Products do not
contain any "time bomb," "Trojan horse," "worm," "drop dead device," "virus" (as
these terms are commonly used in the computer software industry), to disable or
erase software, hardware, or data, or to perform any other similar type of
functions.
6.5 Copies of Products. Upon the execution of this Agreement, NetWolves
will deliver two (2) copies of the current Products to Anicom to be used for the
purposes described in Section 7.7.
6.6 Training. NetWolves will provide personnel of the Anicom Group training
at no additional charge, to the extent NetWolves and Anicom reasonably believe
it will enable the Anicom Group to adequately promote and sell the Products,
including without limitation, the initial training described on Appendix C (the
"Initial Training").
6.7 Product Support. During the term of this Agreement, NetWolves will
provide support (as defined below) to the Anicom Group and Anicom's customers
and resolve reported problems in a timely and professional manner. "Support"
means (a) providing to the Anicom Group any corrections, releases and updates to
the Products; (b) consultation with the Anicom Group and Anicom's customers with
respect to technical questions and suspected errors reported by the Anicom Group
and/or Anicom's customers; and (c) resolution of errors in the Products.
NetWolves will provide Support seven (7) days per week, twenty-four (24) hours
per day, and support will be in the form of telephone, e-mail and fax
communication.
6.8 Upgrades and New Versions. During the term of the Agreement, NetWolves
will provide to Anicom, at prices to be determined in accordance with Section
8.2, the enhancements, upgrades and new versions of the Products that may be
developed by or for NetWolves for use in the Territory (each, a "New Version"),
together with sufficient explanatory materials to enable Anicom to promote and
sell the Products. Such New Versions will become additional Products and will be
subject to the terms and conditions of this Agreement. NetWolves will promptly
offer to Anicom any new computer programs that it develops or acquires the right
to distribute in the Territory which competes with or that can be used as a
substitute for the Products in whole or in part or that perform similar
functions to the Products on computer hardware platforms that are different from
the computer hardware platforms on which the Products currently operate
("Competitive Product"). In the event Anicom accepts such Competitive Product,
the Competitive Product will become additional Products subject to the terms and
conditions of this Agreement.
6.9 Product Development. Anicom and NetWolves will meet not less often than
once each fiscal quarter, at such times and places as the parties mutually
agree, to discuss NetWolves' development plans and any maintenance and support
problems. NetWolves will make reasonable efforts to accommodate Anicom's
requests for Product modification, enhancement or porting to new hardware
platforms.
6.10 Future Deliverables. NetWolves will deliver New Versions and
Competitive Products to Anicom no later than the time NetWolves releases such
Products in final form to any other person or entity, together with any related
documentation, for testing and acceptance in accordance with Anicom's quality
assurance procedures. NetWolves will make reasonable efforts to correct any
errors that Anicom may report to NetWolves, at no additional charge.
6.11 Capacity. NetWolves will use its commercially reasonable efforts to
maintain relationships with manufacturers so that required production capacity
can be maintained to fulfill orders in a timely manner.
VII. RIGHTS, OBLIGATIONS AND RESPONSIBILITIES OF ANICOM
7.1 Warranties and Representations of Anicom. Anicom represents and
warrants as follows: (a) Anicom is a company organized, existing and in good
standing under and by virtue of the laws of the State of Delaware; (b) it has
the power and authority to enter into this Agreement; and (c) the signatory to
this Agreement for Anicom has the power and authority to bind Anicom.
7.2 Sales and Service Responsibility. Anicom shall promote, advertise,
merchandise and sell the Products in the Territory to meet its commitments, and
in connection therewith, shall:
(a) establish and maintain adequate facilities and personnel that
Anicom reasonably believes may be necessary to meet the obligations assumed
hereunder;
(b) formulate and execute marketing and sales plans;
(c) supply sales and inventory data as may be reasonably requested by
NetWolves from time to time in such form as NetWolves may reasonably request,
and which Anicom can readily generate, to assist NetWolves in its production
planning and to provide a basis for evaluating Anicom performance;
(d) maintain at all times the number of Products and assortment of
Products, which Anicom reasonably believes are necessary and appropriate for the
market involved;
(e) maintain and employ in connection with Anicom's business and
operations such working capital as Anicom reasonably believes may be required to
enable Anicom to properly and fully carry out and perform all of Anicom's
duties, obligations and responsibilities under this Agreement;
(f) promote the sale of Products in the Territory, and specifically in
furtherance thereof:
(i) collect technical and engineering requirements from
customers and, to the extent reasonably able, assist in the adaptation
of the Products to customers' uses;
(ii) to the extent it is reasonably able, assist
customers in gathering data on the adaptability of the Products to
customers' potential use of the Products;
(iii) to the extent it is reasonably able, act as a
liaison and coordinator between Anicom's customers and NetWolves in
communicating both customer and NetWolves requirements for technical
specifications, manufacturing schedules, delivery schedules, and other
terms and conditions of sale; and
(iv) to the extent it is reasonably able, follow-up
with Anicom's customers to determine that the Products have
satisfactorily met customer requirements.
7.3 State and Local Taxes. Where required, Anicom shall pay, or cause to be
paid, all taxes (except NetWolves' income taxes), assessments and charges that
are based upon the sale, use or ownership of the Products hereunder, or upon
Anicom's right to sell or lease the same.
7.4 Trademarks. Anicom shall not use any trademark or trade name owned by
NetWolves, either alone or with any other word or words as part of Anicom's
trade or corporate name, without the express written permission of NetWolves.
Anicom shall not remove any such trademarks or trade names from the Products.
Upon request by NetWolves, and in any event upon termination of this Agreement,
Anicom agrees to completely discontinue any use of any of NetWolves' trademarks
or trade names, for any purpose whatsoever, including use in Anicom's trade or
corporate name.
7.5 Anicom Not Agent. Anicom is an independent contractor in relation to
NetWolves, solely and exclusively responsible for its own acts at all times.
Anicom is not authorized to act as agent for NetWolves and has neither the right
nor authority to assume or create obligations of any kind whatsoever on behalf
of NetWolves, or to accept service of legal processes of any kind addressed to
or intended for NetWolves, or to bind NetWolves in any respect whatsoever. The
relationship between NetWolves and Anicom is that of vendor and vendee, and not
of principal and agent.
7.6 Prices. Anicom will establish, at its sole discretion, the prices or
fees that Anicom may charge for the Products. Anicom may offer discounts against
such prices and fees. NetWolves, at its sole discretion, shall establish the
manufacturers' suggested retail price for the Products which shall be made
available to potential purchasers which price shall be the basis for applying
Anicom's discount from list price pursuant to Section 8.2.
7.7 Demonstration and Trial Use Copies. The Anicom Group has the
non-exclusive, non-transferable and royalty-free right to use two copies of the
Products as set forth in Section 6.5, (a) to conduct demonstrations of the
Products at the Anicom Group's premises, (b) to permit potential Anicom Group
customers to conduct evaluations of the Products at the potential Anicom Group
customers' premises and (c) to conduct internal education of the Anicom Group's
employees in the use and operation of the Products. The Anicom Group will take
reasonable measures necessary to remove the Products from its potential Anicom
Group customers' computer hardware on or before the expiration of the trial use
period.
7.8 Repair Items. NetWolves shall sell to the Anicom Group and the Anicom
Group's customers any needed repair parts, supplies, accessories and shall
supply the Anicom Group any needed replacement inventory. In the absence of a
NETS Service Agreement, NetWolves shall charge for such parts, supplies and
accessories in accordance with its published prices from time to time.
7.9 Point-of-Sale Reports. Anicom shall provide NetWolves, within fifteen
(15) days after the end of each month, a copy of Anicom's point-of-sale report
for such month.
VIII. PURCHASE ORDERS, PRICES, AND TERMS OF PAYMENT
8.1 Purchase Orders. All purchase orders of Anicom shall, unless otherwise
agreed by NetWolves from time to time, be in writing and shall set forth the
quantity of the Products desired, the specifications thereof, the desired
delivery date, the price of each Product, and all other relevant information
necessary to effectuate shipment of the Products by NetWolves. It is
contemplated that from time to time purchase orders in forms prepared by the
Anicom Group or other purchasers, may be used in ordering the Products and that
there may be included in such forms certain stipulations, conditions or
agreements not otherwise contained herein. It is expressly understood and agreed
that the provisions of this Agreement shall be deemed a part of each purchase
order accepted by NetWolves and any provision in any purchase order which shall
be inconsistent with or contrary to the provisions of this Agreement shall be
deemed amended or deleted, as the case may be. NetWolves shall deliver to the
destinations directed by the Anicom Group.
8.2 Prices and Terms of Sale.
(a) For the original five year term herein, Anicom shall be invoiced
at the rate of * of NetWolves' established list prices, such amount to be
reduced to * of NetWolves' established list prices commencing with the purchase
of the first Unit after Anicom has ordered, in the aggregate, 3,000 Units.
NetWolves will provide Anicom with thirty (30) days' written notice prior to any
increase in NetWolves' established list prices. In the event Anicom produces an
account that purchases 1,000 Units before Anicom reaches 3,000 Units of Product,
NetWolves agrees to provide Anicom with an additional * discount for that
particular order or orders.
(b) All invoices shall be paid net * days from date of invoice except
Anicom's initial purchase order which will be paid for as follows: (i) 10% of
the amount due will be paid within ten (10) days of the date of this Agreement
and (ii) the balance will be paid within fifteen (15) days after the delivery of
the initial purchase order to the destination of Anicom's choice. Should Anicom
fail to pay any invoice when due, NetWolves will charge interest on the
outstanding balance of invoices at the lower of 1-1/2% compounded monthly or the
maximum rate permitted by law. Anicom shall make payment to NetWolves for all
Products purchased by Anicom in a timely fashion, all in accordance with the
terms of payment set forth above.
(c) Products shall be shipped F.O.B. destination, such destination to
be determined by Anicom. Title and risk of loss shall remain with NetWolves
until delivery to such destination and Anicom will pay the cost of freight so
long as the Products are shipped in accordance with Anicom's instructions.
8.3 Acceptance of Orders. NetWolves shall accept all orders for the
Products submitted to NetWolves by the Anicom Group at NetWolves' Tampa, Florida
or Melville, New York locations. The Anicom Group may cancel an order or any
portion thereof, without charge or penalty, only in the event that such order is
not delivered within seventy-five (75) days of the date on which the order is
submitted to NetWolves.
8.4 Sales through Reseller Program. All orders of Anicom Resellers shall be
processed and made directly through Anicom. All Anicom Resellers appointed by
NetWolves under the Reseller Program shall be required to purchase Products
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* Confidential portions omitted and filed separately with the Commission.
through Anicom or from NetWolves at their choice, subject to Section 3.4 above.
All sales of Products to distributors in NetWolves' Reseller Program shall be
pursuant to the pricing schedule set forth on Appendix D, or as amended from
time to time at NetWolves' option.
8.5 Inventory Adjustments.
(a) NetWolves agrees to provide Anicom with the opportunity to adjust
its levels of NetWolves inventory of Products under the following conditions.
NetWolves shall repurchase or exchange, at NetWolves' option (an "Inventory
Adjustment"): (i) any newly introduced Products, defined as Products which are
in the first six (6) months of the Product introduction period and were not
previously stocked by Anicom (for purposes herein, the product introduction
period begins upon first receipt of the Products by Anicom), and (ii) any slow
move return items, defined as new, unused products in original cartons which (1)
have been in Anicom's inventory for at least three months and (2) have not been
reordered from NetWolves during such three month period.
(b) NetWolves agrees to exchange or credit to Anicom's account all
Products in Anicom's inventory which have been replaced by updated, modified,
enhanced, newly released and/or enhanced Products, New Versions and/or
Competitive Products ("Improved Product Adjustment").
(c) NetWolves agrees that it will allow Anicom to exchange for
Products of equal value up to fifteen percent (15%) of the prior purchases made
during each of NetWolves' fiscal quarters subject to the following:
(i) Products returned must be unused, undamaged, sealed
in their original packages and in merchantable condition;
(ii) all freight charges for said returns shall be paid
by Anicom;
(iii) sales of special configurations of Products
shall not be subject to exchange; and
(iv) Products returned to NetWolves as an Improved
Product Adjustment shall not be included in determining the fifteen
percent (15%) rotation amount.
8.6 Inspection Rights.
(a) Anicom agrees that NetWolves may conduct periodic examinations of
the NetWolves' stock at Anicom's location and Anicom agrees to cooperate with
NetWolves' designated Quality Representative in conducting such periodic
examinations of Anicom's inventory rotation. NetWolves shall provide Anicom with
at least thirty (30) days' notice prior to conducting any such examinations. All
examinations will be conducted during Anicom's normal business hours.
(b) NetWolves agrees that Anicom may conduct periodic examinations of
such of NetWolves' books and records as are necessary in connection with
Anicom's review of any Annual Statement pursuant to Section 5.1, and NetWolves
agrees to cooperate with Anicom's designated representatives during such
examination of NetWolves' books and records. Anicom shall provide NetWolves with
reasonable notice prior to conducting any such examinations. All examinations
shall be conducted during NetWolves' normal business hours.
8.7 Force Majeure. Neither party hereto shall have any liability to the
other party hereto on account of any non-performance or delay resulting from any
strike, lockout, accident, fire, act of God, embargo or governmental action, or
any other like cause beyond the control of such party, whether the same or
different from the matters and things hereinabove specifically enumerated.
IX. WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION
9.1 Warranty. All Products sold to the Anicom Group pursuant to this
Agreement are sold subject to the standard warranty of NetWolves as may be in
effect from time to time (the "Standard Warranty"). The Anicom Group shall be
entitled to pass on the Standard Warranty and the warranty set forth in Section
6.4 hereof to any of the Anicom Group's customers. NetWolves agrees to accept
any such warranty claims directed to the Anicom Group or NetWolves by the Anicom
Group's customers. The Anicom Group is not authorized to assume on behalf of
NetWolves any other obligation or liability in connection with the sale of the
Products in addition to the Standard Warranty and the warranty set forth in
Section 6.4 except as specifically approved by NetWolves. THE ABOVE-MENTIONED
WARRANTIES SHALL BE THE SOLE AND EXCLUSIVE WARRANTIES OF NETWOLVES AND ARE IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, AND NETWOLVES
NEITHER ASSUMES NOR AUTHORIZES ANICOM TO ASSUME FOR IT ANY OTHER OBLIGATIONS OR
LIABILITY IN CONNECTION WITH THE PRODUCTS WITHOUT NETWOLVES' PRIOR WRITTEN
CONSENT.
9.2 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS
OF PROFIT) OF THE OTHER FOR ANY REASON WHATSOEVER, WHETHER ANY CLAIM FOR SUCH
RECOVERY IS BASED UPON THEORIES OF CONTRACT, NEGLIGENCE OR TORT (INCLUDING
STRICT LIABILITY), AND EVEN IF THE PARTY HAS KNOWLEDGE OF THE POSSIBILITY OF THE
POTENTIAL LOSS OR DAMAGE.
9.3 Indemnification. Anicom will promptly notify NetWolves in writing if
any claim is brought or threatened against the Anicom Group that arises from
breach of the representations and warranties set forth in Section 6.4 and 9.1
above. Provided that NetWolves diligently defends any such claim, Anicom will
not settle or compromise any such actual or threatened claim without NetWolves'
prior written consent. Subject to these conditions, NetWolves will indemnify,
defend and hold harmless the Anicom Group against all damages, losses and
expenses (including reasonable attorneys' fees) that they may suffer or incur in
connection with any such actual or threatened claim. Anicom shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of NetWolves unless NetWolves fails to promptly defend or a conflict shall exist
between the positions of NetWolves and Anicom, in which case, the reasonable
fees and expenses of such separate counsel shall be borne by NetWolves.
X. TERM; RENEWAL; TERMINATION
10.1 Term and Renewal. This Agreement shall take effect on the commencement
date as set forth on the title page hereof and shall continue in full force and
effect for a five year period subject to the terms of Sections 5.3(b) and 10.2.
10.2 Termination. The provision of Section 10.1 to the contrary
notwithstanding, this Agreement may be terminated pursuant to the terms of
Section 5.3 and additionally as follows:
(a) By NetWolves, immediately upon giving written notice, in the event
Anicom fails to make full payment of its initial purchase order within fifteen
(15) days after delivery of the Products in accordance with this Agreement;
(b) By NetWolves, upon thirty (30) days' prior written notice to
Anicom at any time during the first two (2) Years, provided that, as a condition
to the effectiveness of such termination, NetWolves shall pay to Anicom a
termination fee of (i) $ * if such termination occurs in Year 1, or (ii) $ * if
such termination occurs in Year 2, in each case, payable within ten (10) days of
notice thereof;
(c) By NetWolves, immediately upon giving written notice, in the event
that there are instituted proceedings by or against Anicom in bankruptcy or
under insolvency laws which are not vacated within sixty (60) days from the date
of filing, Anicom makes an assignment of all or part of its assets for the
benefit of creditors or Anicom shall admit insolvency or ceases to exist;
(d) By either party, if a material breach shall occur which is not
cured within a period of thirty (30) days (ten (10) days with respect to any
payment default) after written notice thereof from the non-breaching party;
-----------------------------------------------------
* Confidential portions omitted and filed separately with the Commission.
(e) By Anicom immediately upon giving written notice, in the event
that there are instituted proceedings by or against NetWolves in bankruptcy or
under insolvency laws which are not vacated within sixty (60) days from the date
of filing, NetWolves makes an assignment of all or part of its assets for the
benefit of creditors or NetWolves shall admit insolvency or ceases to exist; or
(f) By Anicom in the event that the Products cease to be manufactured
by or on behalf of NetWolves.
10.3 Obligations Upon Termination. In the event that this Agreement is
terminated by Anicom in accordance with the terms hereof, or NetWolves
terminates this Agreement pursuant to Section 10.2(b), Anicom shall have the
right, but not the obligation, to direct NetWolves to repurchase from Anicom all
or any portion of any new, undamaged, and unused Products which are in their
original containers theretofore sold by NetWolves to Anicom, and owned by and
remaining in Anicom's inventory (other than Products that have been in inventory
for more than one year), at the original purchase prices, exclusive of any
transportation charges originally paid by Anicom and less any non-reimbursed
transportation charges originally paid by NetWolves. In the event that this
Agreement is terminated by NetWolves in accordance with the terms hereof (other
than pursuant to Section 10.2(b)), NetWolves shall have the right, but not the
obligation, to repurchase Products from Anicom in accordance with the foregoing
at the lower of the prevailing or original purchase prices, exclusive of any
transportation charges originally paid by Anicom and less any non-reimbursed
transportation charges originally paid by NetWolves.
XI. GENERAL PROVISIONS
11.1 Assignment. This Agreement may not be assigned by either party to any
other individual or business entity without the prior written approval of the
non-assigning party, provided that either party may assign its rights and
obligations hereunder to any successor-in-interest resulting from a business
combination without the consent of the other party.
11.2 Notice. All notices permitted or required hereunder shall be in
writing, and shall be effective: (a) as of the date sent, if by confirmed
facsimile or personal delivery, (b) as of the next day following the date on
which sent, if sent by nationally recognized overnight courier or (c) as of the
third day following the date sent, if sent by United States mail, registered or
certified mail, return receipt requested, postage pre-paid. All such notices
shall be sent to the respective parties at the address or facsimile number set
forth on the signature page hereof or to such other address as may be designated
by either party from time to time by notice given in accordance herewith.
11.3 Entire Agreement. This Agreement, together with all attachments hereto
and all purchase orders issued hereunder, constitutes the entire agreement
between the parties and supersedes any and all previous agreements, memoranda or
other understandings of the parties.
This Agreement may be amended only in writing.
11.4 Severability of Provisions. A judicial or administrative declaration
in any jurisdiction of the invalidity of any one or more of the provisions
hereof shall not invalidate the remaining provisions of this Agreement in any
jurisdiction, nor shall such declaration have any effect on the validity or
interpretation of this Agreement outside of that jurisdiction.
11.5 Waiver of Compliance. Any failure by any party hereto to enforce at
any time any term or condition under this Agreement shall not be construed as a
waiver of that party's right thereafter to enforce each and every term and
condition of this Agreement.
11.6 Binding Upon Successors. This Agreement shall be binding upon the
successors and legal representatives of the parties hereto.
11.7 Jurisdiction and Governing Law. This Agreement shall be deemed to have
been made in the State of New York, and shall be construed according to the laws
of that state. Anicom consents to the jurisdiction of any court of general
jurisdiction located within the Borough of Manhattan, City of New York, with
respect to any legal proceedings arising out of this Agreement, and agrees that
the mailing to its last known address by registered mail of any process shall
constitute lawful and valid service of process in any such proceeding, suit, or
controversy. Anicom shall bring any legal proceeding arising out of this
Agreement only in the federal or state courts located in the Borough of
Manhattan, City of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate originals by their duly authorized representatives the
date and year first set forth on the title page hereof.
NETWOLVES CORPORATION
Telecopy No.:
Attn:
BY:/s/____________________________
TITLE:__________________________
DATE:__________________________
ANICOM, INC.
0000 Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
BY:/s/___________________________
TITLE:__________________________
DATE:__________________________
APPENDIX A
ANICOM RESELLERS
Midwest Datacomm
SER Communication
Teknon
Cal Communications
Comdisco
List to be updated from time to time by Anicom.
APPENDIX B
DESCRIPTION OF PRODUCT
See Price List attached as Appendix D.
APPENDIX C
INITIAL TRAINING SCHEDULE
Training to be completed by February 28, 1999.
APPENDIX D
PRICE LIST
SEE ATTACHED NETWOLVES PRICE LIST DATED 10/98
INTERNET SOLUTION SERVER - PRICE LIST
Effective: 10/98
Base Units
Part No. Description List Price
FB-DDR FoxBox DDR *
Connection type: Dial-on-Demand
Includes: 200MHz processor, 16 Megabyte memory, 3.2 Gigabyte storage,
1 10 Megabit Ethernet and 1 v.90 Modem port; web server - intranet only;
mail server - POP/IMAP Internal and SMTP External. Security Features
include: SMTP, FTP, HTTP, DNS LAN to Internet proxies; stateful filters -
all TCP and UDP protocols; no firewall configuration required.
Administrative Interface: Web-based GUI only accessible from Local LAN.
Recommended number of users - up to 8
FB-ISDN FoxBox ISDN *
Connection type: Dial-on-Demand
Includes: 200 MHz processor, 16 Megabyte memory, 3.2 Gigabyte storage, 1
10 Megabit Ethernet and 1 128Kbps ISDN port; web server - intranet/optional
internet; mail server - POP/IMAP Internal and SMTP External. Security
Features include: SMTP, FTP, HTTP, DNS LAN to Internet proxies, optional
Internet to LAN proxies; stateful filters - all TCP and UDP protocols; no
firewall configuration required. Administrative Interface: Web-based GUI
only accessible from Local LAN.
Recommended number of users - up to 25
FB-56K FoxBox56K *
Connection type: Dedicated
Includes: 200MHz processor, 16 Megabyte memory, 3.2 Gigabyte storage, 1
10 Megabit Ethernet and 1 56Kbps Sync Serial port; web server -
intranet/internet; mail server - POP/IMAP Internal and SMTP External.
Security Features include: SMTP, FTP, HTTP, DNS LAN to Internet proxies,
SMTP, FTP, HTTP, DNS Internet to LAN proxies; stateful filters - all TCP
and UDP protocols; Administrative Interface: Web-based GUI only
accessible from Local LAN.
Recommended number of users - up to 20
FB-T1 FoxBox T1 *
Connection type: Dedicated
Includes: 200MHz processor, 16 Megabyte memory, 3.2 Gigabyte storage, 1
10 Megabit Ethernet and 1 T1/E1 Sync Serial port; web server -
intranet/internet; mail server - POP/IMAP Internal and SMTP External.
Security Features include: SMTP, FTP, HTTP, DNS LAN to Internet proxies,
SMTP, FTP, HTTP, DNS Internet to LAN proxies; stateful filters - all TCP
and UDP protocols; Administrative Interface: Web-based GUI only
accessible from Local LAN.
Recommended number of users - up to 400
FB-S2E FoxBox Secure 2E *
Connection type: Dedicated
Includes: 200MHz processor, 16 Megabyte memory, 3.2 Gigabyte storage, 2 10 Megabit
Ethernet port; web server - intranet/internet; mail server - POP/IMAP Internal and SMTP
External. Security Features include: SMTP, FTP, HTTP, DNS LAN to Internet proxies,
SMTP, FTP, HTTP, DNS Internet to LAN proxies; stateful filters - all TCP and UDP
protocols; Administrative Interface: Web-based GUI only accessible from Local LAN.
Recommended number of users - N/A
INTERNET SOLUTION SERVER - "OPTIONS" PRICE LIST
Effective: 10/98
Available Upgrade
Name Version Part Number Description Notes/Requirements Price
FoxBox SCSI Tape 1.1 FB-UN-STAPE-1.1 Includes Adaptec 1520 SCSI Works with all FoxBox *
Backup Controller, HP Superstore models
0x Xxxxxxxx Xxxx Xxxxx, XXXX
Cable, and Backup Software
version 1.1. For use with all
FoxBox models.
FoxBox Fast SCSI 1.0 FB-UN-FSSYS-1.0 Includes Adaptec 2940 Works with all FoxBox *
Hard Drive System Busmastered SCSI Controller, models.
Seagate 9.1 Gig internal
SCSI II Wide hard drive
and cable.
FoxBox Extra 9.1 1.0 FB-UN-SCSID-9.1 Includes Seagate 9.1 Gig Requires FB-UN-SSYS- *
Gig SCSI Hard Drive internal SCSI II Wide 1.0 or later.
hard drive
Software Applications
Name Version Part Number Description Notes/Requirements Price
FoxBox Mail 1.1 FB-DED-MAILA-1.1 Makes the FoxBox email system Works only with Dedicated *
Archive Module compliant with the SEC email FoxBox models (56K, T1,
archiving requirements. S2E)
Archives all inbound and
outbound mail.
FoxBox Advanced 1.1 FB-UN-AACL-1.1 Allows the FoxBox Administrator Works with all FoxBox *
Access Control to block certain web sites from models.
access by computer/users on the
LAN. Also allows FoxBox
Administrator to force users to
authenticate (i.e., login) before
they access the Internet with a
web browser.
FoxBox Advanced 1.0 FB-DED-ANAT-1.0 Allows the FoxBox Administrator Works only with *
NAT Control to create very specific and Dedicated FoxBox models
flexible Xxxxxxx Xxxxxxx (00X, X0, X0x). Adds
Translation NAT) rules that work
seamlessly with the built-in
FoxBox firewall.
FoxBox VPN 1.0 FB-DED-VPN-1.0 Allows the FoxBox Administrator Works only with *
to create an encrypted, virtually Dedicated FoxBox models
dedicated connection between any (56K, T1, 52e). Adds
two Foxboxes running the packet overhead to network
VPN 1.0 software. traffic between FoxBoxes
participating in the VPN due
to encryption.
FoxBox DHCP 1.0 FB-UN-DHCP-1.0 Allows the FoxBox Administrator Works on all FoxBox *
to manage and assign IP addresses models. Ships as standard
centrally from the FoxBox using software with FoxBox A1
the standard DHCP protocol. Version 1.5.
Maintenance Agreement
NetWolves 1.0 FB-UN-NETS-1.0 NetWolves Enchanced Technical Renewable annually. If *
Enchanced Support (NETS) agreement purchased at the same
Technical provides 24x7 12 month time as the system,
Support coverage by telephone, e-mail maintenance starts
(NETS) and remote access. Covers: after 30 day warranty
Agreement advanced hardware replacement expires.
due to hardware failure. Minor
software upgrades for the contract
term for purchased systems. Access
to special areas of the Web site.
APPENDIX E
RESELLER PROGRAM
*
