Exhibit 10.1
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CONFIDENTIAL TREATMENT
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SOLUTION PROVIDER AGREEMENT
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THIS SOLUTION PROVIDER AGREEMENT (this "Agreement"), dated as of
September 8, 1998 (the "Effective Date"), is made by and between BUSINESS
PARTNER SOLUTIONS, INC., a Texas corporation ("BPS") having offices at 0000 Xx.
Xxxx 0000 Xxxx, Xxx Xxxxxxx, Xxxxx 00000 and REAL APPLICATIONS, LTD. or its
successor in interest, a California corporation ("REAL"), having offices at
00000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
BPS is authorized to market and distribute certain Products, including
IBM Products, to resellers; BPS is authorized and wishes to appoint REAL as a
solution provider affiliate to sell to End-Users the IBM Products it acquires
from BPS; and REAL is willing to serve in such capacities:
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and mutual
promises set forth in this Agreement and for other and further valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. The terms used in this Agreement have the following
meanings:
1.1 "End User" means anyone, unaffiliated with REAL, who acquires Products
for its own use and not for resale
1.2 "IBM" means International Business Machines, Inc. and its subsidiaries.
1.3 "Machine" means an IBM RS/6000, IBM 9401, or IBM Netfinity Server
together with their respective features, conversions, upgrades, elements,
accessories, cables or any combination of them (provided by IBM to BPS) approved
by IBM to be provided to REAL.
1.4 "Product" means a Machine, Program or Service which BPS has been
authorized to distribute to REAL.
1.5 "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
1.6 "Program" means an IBM licensed program (provided by IBM to BPS)
approved by IBM to be provided to REAL. Program does not include an IBM's
licensed internal code.
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1.7 "Service" means assistance performed or marketed by BPS, including
without limitation use of a resource (such as a network) approved by IBM to be
provided to REAL.
1.8 "Value Added Enhancement" or "VAE" means the industry specific IBM
approved Application Software Program.
2. APPOINTMENT OF SOLUTION PROVIDER. BPS hereby appoints REAL as one of
its Solution Providers (also referred to as solution provider affiliates) of IBM
Products for marketing and sale to End Users in the United States, Canada and
Puerto Rico with REAL's VAEs. This appointment is not exclusive with respect to
BPS and BPS has entered into and reserves the right to enter into similar
agreements with others for the purpose of marketing and distributing Products.
This appointment is exclusive with respect to providing IBM Products that BPS is
authorized to distribute to REAL for resale, and REAL agrees to not enter into
any similar arrangement with any others for the purpose of selling such IBM
Products to End Users; provided, however, that REAL may purchase ***.
3. REAL OBLIGATIONS. REAL shall comply with any obligations or restric-
tions imposed by IBM under the terms of any applicable agreement between BPS and
IBM, as such terms may change from time to time, or between REAL and IBM, as
such terms may change from time to time, and REAL agrees to be bound by and
comply with all such obligations or restrictions. In particular, and without
limitation, REAL will comply with all IBM requirements set forth in REAL's
agreement with IBM, as amended from time to time. If REAL breaches any of the
IBM requirements set forth in REAL's agreement with IBM, REAL shall reimburse
BPS for any losses or damages proximately caused to BPS by said breaches.
4. BPS Obligations
4.1 BPS SERVICE LEVELS. BPS shall comply with any obligations or
restrictions imposed by IBM under the terms of any applicable agreement between
BPS and IBM, as such terms may change from time to time. BPS shall exercise
commercially reasonable efforts to: communicate to IBM all of REAL's equipment
orders in a timely manner and to express to IBM the time requirements that REAL
desires; provide REAL the IBM order information, as provided by IBM which may
include, the plant order number, shipment dates and M.E.S. numbers, within ***
hours after BPS receives IBM's acknowledgment of REAL's order, provided REAL
accurately places an order in accordance with IBM's and BPS's requirements,
place orders with IBM within *** hours; provide a dedicated employee to service
the account for customer service and marketing support purposes and provide
other support employees as needed; and provide a dedicated sales representative.
If REAL shall determine that in its opinion BPS has routinely failed to perform
adequately in this regard, it shall set forth in writing and in detail its
objections and BPS shall have *** to cure such routine failures. To the extent
the requirements imposed on BPS under this Section 4 exceed those which IBM, in
its reasonable discretion, determines are to be required of its distributors,
then the requirements imposed on BPS shall be adjusted so that they are no more
stringent than the requirements imposed by IBM on BPS as a distributor.
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4.2 IBM REBATES. BPS will forward to REAL any rebates, special promotions
or marketing funds that are intended by IBM to be passed on to solution provider
Tier II's . BPS will forward such payments to REAL within *** after BPS receives
such amounts from IBM.
4.3 LINE OF CREDIT. BPS WILL MAINTAIN A SUFFICIENT LINE OF CREDIT TO
SUPPORT REAL'S VOLUME
5. DELIVERY AND TITLE.
5.1 DELIVERY. Upon receipt of each purchase order by BPS, if the Product
is not then in BPS's inventory, BPS will, as soon as reasonably possible, but no
later than *** hours, following receipt of such purchase order so long as such
purchase order is complete and in accordance with IBM's and BPS' requirements,
place the order with IBM. With respect to Products in BPS's inventory and which
do not require reconfiguration, BPS shall ship such Products within *** hours
following receipt of such purchase order so long as such purchase order is
complete and in accordance with IBM's and BPS' requirements. With respect to
Products in BPS' inventory and which do require reconfiguration, BPS shall ship
such Products within *** following receipt of such purchase order so long as
such purchase order is complete and in accordance with IBM's and BPS'
requirements. All other Equipment shall be shipped within the time frame
prescribed by IBM. All such shipments shall be F.O.B. BPS's or IBM's facility in
the continental United States. Such Products shall be insured by BPS at REAL's
cost; provided, however, REAL shall not be obligated to pay any shipping or
insurance charges to the extent such charges are paid by IBM. All Products shall
be packaged for shipment in accordance with IBM's usual and customary practices
which shall be reasonably calculated to provide adequate protection for its
Products. The method of shipment and common carrier shall be selected by REAL.
5.2 PASSING OF TITLE. Title to the IBM Machines will pass from BPS to
REAL. REAL shall pass title to the Machines directly to the End User or, if
applicable, to a third party financing institution on behalf of the End User.
IBM does not transfer title to Programs.
6. PRICE; PAYMENT.
6.1 PRODUCT COSTS; PAYMENT TERMS.
6.1.1 Except as set forth in paragraphs 6.1.2, 6.1.3 and 6.1.7
below, for the first *** of this Agreement, REAL shall acquire the
Products from BPS at the prices of each such Product as per Exhibit A
to this Agreement (the "Price Schedule"). The prices set forth on the
Price Schedule shall be increased or decreased, as the case may be,
From time to time to reflect increases or decreases, as the case may
be, in IBM's price to BPS. For Products which do not have a price set
forth on the Price Schedule, the cost to REAL shall be mutually agreed
upon by both parties. In the *** of this Agreement, REAL shall acquire
Products from BPS at ***.
6.1.2 ***
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6.1.3 ***
6.1.4 BPS shall not be responsible for any applicable taxes
resulting exclusively from REAL's purchases of Products under this
Agreement, other than taxes based on BPS's income. Payment of BPS's
invoice shall be due *** after the shipment date. Real shall pay all
applicable sales taxes.
6.1.5 If REAL modifies or cancels any order and IBM bills BPS
for rework or other charges associated with such modified or cancelled
order, then BPS may invoice REAL for such charges, and REAL will pay
BPS for such charges within *** of the date of BPS's invoice.
6.1.6 Any price decrease for a Product as contemplated by
Section 6.1.1 above shall be effective on the effective date of IBM's
corresponding price reduction with respect to such Product. REAL shall
receive the benefit of any such IBM price reduction with respect to
any Product covered by such price reduction that *** (ii) is ordered
by REAL subsequent to the effective date of such IBM price reduction.
Any price increase for a Product as contemplated by Section 6.1.1
above shall be effective on the effective date of the IBM's price
increase with respect to such Product.
6.1.7 Notwithstanding anything to the contrary in this
Agreement, at no time shall the price payable by REAL be less than
IBM's price to BPS ***.
6.2 DELINQUENT PAYMENTS. If payments owned by either party under this
Agreement become delinquent, and the amount of such payment is not in dispute,
then the party to which such payment is owed may do one or more of the
following: (a) impose a finance charge that is equal to the lesser of *** and
the maximum permitted by law, on the delinquent portion of the balance due; or
(b) pursue any other remedy available at law to collect such delinquent amount.
7. DISPUTE RESOLUTION. Any controversy or claim relating to this Agreement
or any breach thereof shall be settled solely and finally by arbitration in
accordance with the rules of the American Arbitration Association ("AAA") then
in effect in the State of California, and judgment upon such award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof. The
arbitrator may provide that the cost of the arbitration (including reasonable
legal fees) incurred by the prevailing party) will be borne by the
non-prevailing party.
8. PRODUCT WARRANTIES.
8.1 PRODUCT WARRANTY. REAL acknowledges that the Products sold under this
Agreement are produced or provided by IBM , and there are no warranties with
respect to the Products, except to the extent that IBM has made available
warranties that operate to the benefit of REAL. In addition all Products will be
certified as eligible for IBM maintenance programs BPS further represents and
warrants to REAL that: (a) to the extent BPS takes title
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to the Products, it has and is hereby transferring to REAL all its ownership,
right, title and interest in and to such Products and (b) the Products are free
and clear of all liens, subject to any purchase money liens imposed by IBM.
8.2 EXCLUSIVE REMEDY. In case of breach of the above warranties set forth
in Section 8.1(a) and (b) above, REAL's exclusive remedy against BPS, and BPS's
sole liability shall be payment of REAL's damages that result from such breach
in an amount up to, but not to exceed the purchase price paid by REAL for the
defective Product. In case of a breach of any other warranties set forth in
Section 8.1 above, REAL's exclusive remedy against BPS and BPS' sole liability,
shall be to facilitate REAL's receipt of warranty services, by either BPS or
IBM, in accordance with the warranty provided by IBM, including to the extent
that BPS's agreements with IBM cover claims relating to intellectual property
infringement and provide indemnification over such claims. BPS shall have no
warranty obligations beyond those provided by IBM. If, in accordance with the
terms of the IBM warranty, REAL returns a Product and the Product is found
defective by BPS or IBM under the terms of such warranty, then BPS will prepay
return transportation charges from REAL. BPS or IBM shall have a reasonable time
to make repairs or replace Products found to be defective. All replaced parts
will become the property of BPS or IBM on an exchange basis.
8.3 LIMITATION. BPS's warranty will not apply to a Product if its
correction, repair or replacement is required due to extrinsic causes, such as
(a) natural disasters, including fire, smoke, water, wind, earthquakes or
lightning, (b) electric power failures, (c) the failure to maintain appropriate
environmental conditions, (d) the neglect, misuse or other than the ordinary use
of the Products, other than neglect or misuse by BPS, (e) the relocation of the
Products or attempted repairs or alterations by persons other than those
employed by BPS or IBM when not previously approved by BPS, or (f) the
connection of the Products with any items or devices not provided by BPS. If the
correction, repair or replacement is required due to causes within REAL's
control, such as REAL's neglect or misuse of the Products, then BPS may charge
REAL for the correction, repair or replacement on a time-and-materials
basis at BPS's then-current reasonable rates, plus reimbursement for reasonable
travel and out-of-pocket expenses.
8.4 END-USER DISCLAIMER. THE FOREGOING WARRANTIES OF BPS ARE FOR THE
BENEFIT OF, AND APPLY ONLY TO REAL. REAL SHALL INCLUDE THE FOLLOWING STATEMENT,
OR A STATEMENT WITH SUBSTANTIALLY THE SAME MEANING AND EFFECT IN EACH AGREEMENT
UNDER WHICH REAL PROVIDES PRODUCTS TO END USERS.
"Customer acknowledges that the Products sold under this Agreement are
produced by one (1) or more independent manufacturers and we represent
that to the extent the Products are subject to assignable
manufacturer's warranties, we are assigning such warranties to
Customer. We further represent and warrant to Customer that, to the
extent we take title to the Products from the manufacturer, it has and
is hereby transferring to Customer all its ownership, right, title and
interest in and to such Products. EXCEPT FOR THE AFOREMENTIONED
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WARRANTIES, OUR SUPPLIERS AND MANUFACTURERS MAKE NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE PRODUCTS AND SPECIFICALLY
EXCLUDE THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. NEITHER WE NOR ANY OTHER PARTY HAS ANY AUTHORITY TO
MAKE ANY OTHER REPRESENTATION ON BEHALF OF US OR OUR SUPPLIERS OR
MANUFACTURERS OR OTHERWISE TO BIND US OR OUR SUPPLIERS OR
MANUFACTURERS. IN NO EVENT SHALL WE, OR OUR SUPPLIERS OR MANUFACTURERS
BE LIABLE TO ANYONE FOR ANY INDIRECT, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES, WHETHER RELATED TO WARRANTY OR ANY OTHER CLAIM."
8.5 BPS DISCLAIMER.
(a) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION, ALL WARRANTIES,
CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES, WHETHER EXPRESS OR
IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY BPS OR
OTHERWISE (INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR PARTICULAR PURPOSE OR OF ERROR-FREE AND UNINTERRUPTED USE) ARE
HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. REAL SHALL NOT REPRESENT TO ANY
THIRD PARTY THAT BPS HAS APPROVED, ENDORSED, WARRANTED OR GUARANTEED ANY VAE
WITHOUT THE SPECIFIC PRIOR WRITTEN CONSENT OF BPS.
(b) BPS makes no representation or warranty that REAL will succeed in
marketing any Products to any End User, nor will BPS be liable to REAL for
REAL's failure to sell any Products.
9. LIMITATION ON LIABILITY. EXCEPT FOR CLAIMS ARISING OUT OF A BREACH OF
SECTION 8.4 ABOVE, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR INCIDENTAL DAMAGES, WHETHER
FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF THE OTHER PARTY OR ITS END-
USERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL,
PROFITS, INVESTMENTS, USE OF MONEY OR USE OF BPS PRODUCTS, INTERRUPTION IN USE
OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS,
OR LABOR CLAIMS), ARISING OUT OF BREACH OF EXPRESS OR IMPLIED WARRANTY, BREACH
OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR
OTHERWISE, EXCEPT ONLY IN THE CASE OF DEATH OR PERSONAL INJURY WHERE AND TO THE
EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY.
10. TERM. Subject to earlier termination in accordance with Section 11 of
this Agreement, the term of this Agreement shall commence on the date first set
forth above and
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continue for a period of *** thereafter at which time this Agreement will
terminate unless otherwise mutually agreed to by the Parties hereto.
11. TERMINATION.
11.1 TERMINATION BY BPS; EXPIRATION. BPS shall have the right to terminate
this Agreement immediately upon written notice to REAL if BPS is notified by IBM
that REAL no longer meets IBM's guidelines or if REAL is in Material Breach of
its obligations under this Agreement and fails to cure such breach within *** of
the date that BPS provides written notice of such Material Breach to REAL.
11.2 TERMINATION BY REAL. REAL shall have the right to terminate this
Agreement, upon written notice to BPS: (a) if BPS's contractual relationship
with IBM is terminated or expires and is not renewed; (b) subject to the notice
and cure periods set forth below, BPS commits a Material Breach (as defined
below) of this Agreement.
For purposes of this Agreement, a "Material Breach" shall mean a material breach
of this Agreement, including, without limitation, (a) BPS's failure to pass on
material rebates, discounts, etc., which are intended by IBM to be passed on to
Solution Provider Tier II's and which breach BPS fails to cure within *** of
written notice of such breach (b) BPS unreasonably refuses to accept or process
a material or service order under this Agreement, which breach BPS fails to cure
within *** of written notice of such breach; (c) BPS fails to cure within the
time prescribed by Section 4 material failures of service levels after receiving
the notice required by Section 4 and (d) BPS fails to ship Equipment within the
times prescribed by Section 5.1 and which breach BPS fails to cure within *** of
written notice of such breach. Real agrees that termination of this Agreement
together with a claim for direct damages proximately caused by BPS shall be
REAL's sole remedy for a breach by BPS of its obligations under Sections 4
and/or 5 of this Agreement.
11.3 EFFECT OF TERMINATION OR EXPIRATION. Upon the expiration or
termination of this Agreement, REAL will (a) continue to fulfill its obligations
to End Users and in such a way as not to reflect adversely on BPS or the
Products; (b) pay to BPS when due all outstanding amounts including, but not
limited to, any amounts owing under Sections 3.2 and 6 hereof within *** of the
shipment date. Upon the expiration or termination of this Agreement, BPS will
continue to fulfill its obligations to End Users and in such a way as not to
reflect adversely on REAL, or the Products. Unless BPS has terminated this
Agreement for REAL's Material Breach, or is otherwise prohibited by IBM from
fulfilling orders placed by REAL, BPS will fulfill all orders placed by REAL
under this Agreement prior to the termination date.
12. MISCELLANEOUS PROVISIONS.
12.1 INDEPENDENT CONTRACTOR. BPS and REAL are independent contractors.
Neither party will have any right or authority to act on behalf of the other and
neither party shall represent that it has such right or authority.
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12.2 ASSIGNMENT. REAL agrees not to assign, or otherwise transfer, this
Agreement or its rights under it or delegate its obligations or appoint another
reseller (including a related company) or agent to represent it: (a) without
the prior written consent of BPS which shall not be unreasonably withheld, or
(b) REAL may assign this Agreement to an entity that purchases a majority of
REAL's stock having a right to elect a majority of REAL's board of directors or
similar governing body or that purchases all or substantially all of REAL's
assets, provided that: (i) such successor is authorized by IBM to purchase IBM
Products from BPS; and (ii) such successor agrees in writing to be bound by all
of the terms and conditions of this Agreement. BPS may assign or otherwise
transfer this Agreement to a successor to a majority of its voting stock or to
a purchaser of all or substantially all of BPS or of the business division of
BPS that services this Agreement.
12.3 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement, and (if appropriate) such
provision to other persons or circumstances, shall remain in full force and
effect and be interpreted so as best to reasonably effect the intent of the
parties hereto.
12.4 WAIVER, AMENDMENT, MODIFICATION. Any waiver, amendment or
other modification of this Agreement will not be effective unless in writing and
signed by the party against whom enforcement is sought. The failure by either
party to exercise any of its rights hereunder will not be deemed a waiver of
such rights in the future or a waiver of any other rights under this Agreement.
12.5 NOTICES. Any notice, approval or other communication required or
permitted under this Agreement between the parties will be given in writing and
will be sent by certified mail or registered mail, postage prepaid with return
receipt requested, to the address specified above or to any other address that
may be designated by prior notice. Any such notice, approval or other
communication will be deemed to have been delivered when received.
12.6 GOVERNING LAW AND JURISDICTION. This Agreement will be governed by and
interpreted in accordance with the laws of the State of California, excluding
its conflict of law principles. Subject to the dispute resolution requirements
set forth in Section 7 above, each party consents to the exclusive jurisdiction
and venue of the courts located in and serving Santa Xxxxx County, California in
all matters arising out of or relating to this Agreement.
12.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same document.
12.8 ENTIRE AGREEMENT. This Agreement constitutes the complete and entire
statement of all terms, conditions and representations of agreement between BPS
and REAL with respect to the subject matter contained herein and supersedes all
prior oral or written agreements or understandings.
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REAL APPLICATIONS, LTD., a BUSINESS PARTNER SOLUTIONS, INC.,
California corporation a Texas corporation
By ______________________________ By ______________________________
Its _____________________________ Its _____________________________
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EXHIBIT A
PRICE SCHEDULE
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