EXHIBIT 10.35
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DISTRIBUTION AGREEMENT DATED OCTOBER 1, 1994 BETWEEN
THE REGISTRANT AND SYMBOL TECHNOLOGIES, INC*
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* Confidential Treatment pursuant to 17 CFR (S)(S) 200.80, 200.83, and 230.406
and 5 USC (S) 502 has been requested regarding certain portions of the indicated
Exhibit, which portions have been filed separately with the Commission.
Exhibit 10.35
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Confidential Treatment Requested
SYMBOL TECHNOLOGIES, INC.
DISTRIBUTION AGREEMENT
As of October 1, 1994 , Symbol Technologies, Inc., a Delaware corporation
having is principal place of business at 000 Xxxxxx Xxxxx, Xxxxxxx, XX 00000
("Symbol"), and ScanSource, a South Carolina corporation having its principal
place of business at Greenville, South Carolina ("Distributor"), agree as
follows:
1. APPOINTMENT. Symbol appoints Distributor an authorized distributor of
its Products within the United States and Puerto Rico (the "Territory"). Symbol
remains free to distribute its Products within the Territory through other
distributors or dealers. As used in this Agreement, "Products" means all
products offered for sale by Symbol generally as set forth and described in
Symbol's current price list. Products may be added to or deleted from the price
list by Symbol on sixty days prior written notice to Distributor.
2. RESPONSIBILITIES OF DISTRIBUTOR. Distributor will use its reasonable best
efforts to:
a. maintain a competent and aggressive sales force and otherwise promote the
sale, lease, or other distribution of the Products, TO RESELLERS ONLY,
within the Territory;
b. maintain a representative inventory of Products in reasonably sufficient
quantities to provide adequate and timely delivery to Distributor's
customers; and
c. participate in such training programs as may be offered by Symbol.
3. RESPONSIBILITIES OF SYMBOL. Symbol will use its reasonable best efforts
to:
a. furnish Distributor with current price and product information in suitable
electronic formats and with a reasonable supply of such printed sales
literature, books, catalogues, and the like as Symbol may prepare and make
available such training and technical and sales support as may be
necessary to assist Distributor in effectively carrying out its activities
under this Agreement;
b. advertise the Products throughout the Territory, inform the public that
Distributor is an authorized distributor of the Products, encourage
customers or potential customers potential customers for the Products to
order the same from its distributors (including Distributor), and refer to
its distributors (including Distributor) leads and orders involving
quantities of Products normally handled by distribution; and
c. establish and maintain quality control manufacturing, handling and testing
procedures, and such other programs as are necessary to ensure that the
Products, as manufactured and sold to Distributor are of the highest
quality and reliability, are in full compliance with all applicable laws,
standards, codes and regulations, are duly marked and labeled and are
suitable for resale or other distribution.
4. REPORTS AND AUDITS. Within fifteen business days after the end of each
month, Distributor will send to Symbol in a mutually agreeable format, (i) a
stock status report showing the month end on-hand quantities of Products by
device type and warehouse location and (ii) a point of sale report showing each
sale of the Products for the month by device type, selling location, customer
name and address, and sale price. No more than twice during any year, at
reasonable times and upon reasonable prior notice employees of Symbol may (i)
conduct a physical inventory of Products in any stocking location (or, in
automated facilities, observe cycle counts and related methodology) or (ii)
audit such business records, located at Distributor's corporate headquarters, as
pertain solely to the purchase of Products hereunder during any such year.
5. ORDERS; DELIVERY; RESCHEDULING; CANCELLATION
A. ORDERS Distributor will place written, telefaxed, or electronically
interchanged purchase orders with written confirmation within thirty days,
which will include the Products ordered, quantities requested, delivery
dates, prices, and shipping instructions (when necessary). Symbol will
acknowledge each order in writing, by telefax or electronic interchange
within ten business days of the receipt thereof and will confirm the
requested shipment date or specify an alternative shipment date
("Acknowledged Shipment Date").
B. SHIPPING All shipments are F.O.B. Symbol's point of manufacture.
1
C. RESCHEDULING AND CANCELLATION Distributor may, on at least thirty days
prior written notice, reschedule or cancel the Acknowledged Shipment Date
of any order without cost or penalty.
D. DISTRIBUTOR'S ACCEPTANCE Distributor's acceptance of an order will occur
upon its receipt of the Products, unless Distributor notifies Symbol
within thirty business days of such receipt that the products are
defective or do not conform to Symbol's applicable warranty, the terms of
this Agreement, or Distributor's order.
E. DOA'S Products received by Distributor that are defective on arrival will
be handled under standard procedures then currently in place for DOA's and
expedited replacement.
6. PRICES. The paces for Products will be as set forth in Symbol's Price
list in effect as of the date of this Agreement, subject to discounts equal to
Level "8" in the attached "Distributor Product and Discount Schedule". For
discount levels above Xxxxx 0, see attached Addendum. Prices are also subject to
change from such date forward upon at least sixty days prior written notice from
Symbol to Distributor.
A. PRICE INCREASES Prior to the effective date of a price increase,
Distributor may order Products for delivery within the term at the prior
(i.e., lower) price. Products shipped under orders submitted by
Distributor prior to the effective date of any price increase will be
shipped and invoiced at the price in effect at the time of order
placement, providing shipment occurs within 90 days.
B. PRICE DECREASES In the event Symbol decreases the price of any Product,
Distributor will receive a credit equal to the difference between the
price paid for the Product by Distributor (less any prior credits taken by
Distributor on such Product) and the new decreased price for the Product
multiplied by the quantity of such Product in Distributor's inventory, or
in transit to Distributor, on the effective date of the decrease. Price
protection will also apply to all Products returned to Distributor by its
customers within sixty days of the effective date. Distributor will submit
to Symbol within sixty business days following the later of the effective
date of such price decrease or the date Distributor actually receives
notice thereof, a list of the Products upon which such credit is due. All
Products shipped after the effective date of any price decrease will be
shipped and invoiced at the price in effect at the time of shipment.
C. SUPPLIER'S REPRESENTATION Symbol represents and warrants that its
practices and policies, including prices and discounts, comply with all
applicable laws.
D. TAXES AND OTHER CHARGES Distributor will pay any applicable sales or use
taxes pertaining to its purchase of the Products (and, if Products are to
be delivered to points outside the United States, the cost of packing,
duties, licenses, and fees) if Included as a separate item on the invoices
sent by Symbol to Distributor.
E. TERMS Terms of payment are two percent 20 net 45 days.
7. RETURN OF PRODUCT
A. [*]
8. PRODUCT CHANGES
A. OBSOLESCENCE AND MODIFICATION Symbol reserves the right to discontinue
the manufacture or sale of, or otherwise render or treat as obsolete, any
or all of the Products (or to modify the design or manufacture of any
Product so as to preclude or limit Distributor's sales of such Product)
upon at least ninety days prior written notice to Distributor. Distributor
may, in its discretion, within sixty days of its receipt of such notice,
notify Symbol in writing of its intention to return any or all such
Products which remain in its inventory for a credit equal to the net price
paid by Distributor for such Products. The Products will be returned
within sixty days of the date of Distributor's receipt of Symbol's return
authorization.
B. INTRODUCTION OF NEW PRODUCTS Symbol will give Distributor at least thirty
days prior written notice of the introduction of any new Products that
preclude or materially limit Distributor from selling any Products in its
inventory and will work with Distributor to resell the affected inventory.
If, despite such efforts, affected Product still remains in Distributor's
* Redacted pursuant to application for confidential treatment.
2
inventory, Symbol will replace it with the new Products within one hundred
twenty days of the official public announcement, or Symbol's first
shipment, of such new Products, whichever occurs first, for only the net
cost difference, plus shipping.
9. WARRANTY. The Products will be covered by Symbol's standard warranties,
copies of which are included in Product packaging, plus ninety days for resale
stocking.
10. COMPLIANCE WITH LAWS. Despite anything to the contrary contained in
Addendum I or elsewhere in this Agreement, Symbol will indemnify Distributor
against, and hold it harmless from, any cost, loss, damage, or liability
(including reasonable attorney's fees) arising from or related to Symbol's
conduct or the failure, or alleged failure, of the Products, as manufactured and
sold to Distributor to fully comply with all applicable Laws, standards, codes,
specifications, and regulations or to be suitable for resale or other
distribution by Distributor as contemplated by this Agreement. All warranty and
indemnification provisions of this Agreement will survive the termination
hereof.
11. INTELLECTUAL PROPERTY. Symbol will indemnify, defend and otherwise hold
harmless Distributor, its affiliates and its customers from all cost, loss,
damage, or liability arising from any proceeding or claim brought or asserted
against Distributor, its affiliates or its customers to the extent such
proceeding or claim is based on an allegation that the Products, any part
thereof, or their distribution or use infringe any patent, copyright, trademark,
trade secret, right in a mask work, or any similar claim, if Distributor
notifies Symbol of any such proceeding or claim promptly after it becomes known
and provides all the assistance and cooperation to Symbol that is reasonably
requested. Symbol will not be liable to Distributor under this paragraph to the
extent that any claim is based on a use for which the Product or part was not
designed, or an alteration of the Product by Distributor or at its direction
which caused the infringement.
12. TERM AND TERMINATION
A. Term This Agreement is effective once signed by both parties and until
terminated in accordance with the provisions of this paragraph. Either
party may at any time terminate this Agreement without cause and far its
convenience by giving sixty days prior written notice to the other. Symbol
and Distributor represent that they have considered the making of
expenditures in preparing to perform under this Agreement. In that regard,
both parties acknowledge that neither party will in any way be liable to
the other for any loss, expense, or damage (including special,
consequential or incidental damages) by reason of any termination of this
Agreement without cause, excepting only the then current value of equipment
purchased or improvements made by either party and dedicated to the
Products or services of such other party.
B. EVENTS OF DEFAULT Any of the following is a default under this Agreement:
i. the assignment of this Agreement by either party without the prior
written consent of the other party.
ii. either party's failure to cure any breach of this Agreement within
sixty days following written notice thereof from the other (or, if not
curable within sixty days, if the cure is not commenced within that
period and thereafter diligently completed); and,
iii. the assignment by either party of its business for the benefit of
creditors, or the filing of a petition by either party under
Bankruptcy Code or any similar statute, or the filing of such a
petition against either of them which is not discharged or stayed
within sixty days, or the appointment of a receiver or similar officer
to take charge of either party's property, or any other act indicative
of bankruptcy or insolvency.
C. REMEDIES UPON DEFAULT In the event of either party's default, the other
party may terminate this Agreement for cause by written notice and/or avail
itself of any remedy available at law or equity.
D. RETURN OF INVENTORY In the event of any termination of this Agreement,
Symbol may, at its option, repurchase from Distributor any or all unsold
Products designated by Distributor from its inventory at the price paid
therefor by Distributor, less any prior credits taken by Distributor on
such Products. If Distributor terminates this Agreement without cause, or
Symbol terminates it with cause, the price will be reduced by a five
percent handling charge and Distributor will pay all freight and shipping
3
charges (which otherwise will be paid by Symbol). In the event of any
termination, Symbol will, at Distributor's request, honor any Distributor
purchase order then outstanding.
Symbol will only accept those Products which are in their original unopened
packaging or are undamaged and in merchantable condition. No termination
of this Agreement will affect any obligation of either party to pay amounts
due to the other hereunder.
13. MARKETING COMMUNICATION.
[*]
14. NOTICES. Notices under this Agreement will be deemed given when delivered
by hand or deposited in the United States mail as certified mail, postage
prepaid, addressed to the president of either party at its then principal place
of business.
15. TRADEMARKS. This Agreement does not create, and neither party will have
any right in, or to the use of, any xxxx, name, style, or logo of the other
party. Distributor is, however, hereby granted a nonexclusive right to use
Symbol's marks, names, or logos to identify itself as an authorized distributor
of the Products and for advertising and promoting its services under this
Agreement.
16. CONFIDENTIAL INFORMATION. Each party will receive and maintain in
confidence all proprietary information, trade secrets or other know-how
belonging to the other (including but not limited to knowledge of manufacturing
or technical processes, financial and systems data, and customer information)
provided that any such information, secrets, or know-how is expressly designated
as being confidential, except and to the extent that disclosure is required by
law, regulation, or court order, or enters into the public domain through no
fault of the party obligated to maintain such confidentiality. Without limiting
the foregoing, all material and information made known to Symbol by Distributor
pursuant to paragraph 4 of this Agreement is hereby designated as confidential.
17. CREDITS. In the event Distributor is entitled to a credit from Symbol
which exceeds Distributor's obligation to Symbol at the time, Symbol will
promptly pay the amount of such excess to Distributor.
18. AUTHORIZATION NOT UNREASONABLY WITHHELD. Whenever any consent, action, or
authorization is required or requested of either party hereunder, it will not be
unreasonably withheld or delayed. Any required return authorization will be
granted within thirty days from the day it is requested.
19. FORCE MAJEURE. Neither party will bear any liability to the other for any
failure or delay to the extent that it results from acts of God, labor
difficulties, inability to obtain materials, or any other cause beyond such
party's reasonable control.
20. RELATIONSHIP OF PARTIES. The parties are independent contractors, each in
full control of its business. Under no circumstances will either party have the
right or authority to act or make any commitment on behalf of or bind the other
or represent the other as its agent in any way.
21. PUBLICITY. This Agreement is confidential within the meaning of paragraph
16. Except as required by law, no press release or other like publicity
regarding the relationship between Distributor and Symbol, this Agreement, or
its termination will be made without the other party's prior approval.
22. SOFTWARE. Symbol warrants that it is the owner or licensee of all
software provided to Distributor under this Agreement (whether or not included
or embedded in any other Product) and has the authority to permit Distributor to
use or resell or sublicense the software to third parties. Distributor will not
resell or sublicense the software without the license agreement provided by
Symbol for that purpose and will advise Symbol of any known breach of the terms
thereof.
23. GENERAL
A. ENTIRE AGREEMENT This Agreement supersedes all prior communications or
understandings between Distributor and Symbol and constitutes the entire
agreement between the parties with respect to the matters covered herein.
In the event of a conflict or inconsistency between the terms
* Redacted pursuant to application for confidential treatment.
4
of this Agreement and those of any order, quotation, acknowledgment, or
other communication from one party to the other, the terms of this
Agreement will be controlling.
B. AMENDMENT This Agreement cannot be changed in any way except by a writing
signed by the party against which the enforcement of the change is sought.
C. GOVERNING LAW This Agreement is made in, governed by, and will be
construed solely in accordance with, the internal laws of the State of New
York. Any action brought under or in connection with this Agreement must
be instituted in the state or federal forum covering the defending party's
principal place of business. In any such action, the prevailing party's
reasonable legal fees will be paid by the other party.
D. REFORMATION In the event any provision of this Agreement is held to be
invalid or unenforceable for any reason, such invalidity or
unenforceability will attach only to such provision and will not affect or
render invalid or unenforceable any other provision of this Agreement. Any
such provision may be reformed by a court of competent jurisdiction so as
to render the same valid or enforceable while most nearly effectuating the
intent of the parties.
E. ASSIGNMENT Neither party has the right to assign this Agreement in whole
or in part without the prior written consent of the other except to
another corporation wholly-owned by or under common control with it. For
purposes hereof, an assignment includes without limitation, a merger, sale
of assets or business, or other transfer of control by operation of law or
otherwise.
Each party has entered this Agreement by having an authorized representative
sign below.
FOR SYMBOL
Name X. Xxxxxxxx
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Signature /s/ X. XXXXXXXX
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Title Vice President
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Date 10/29/94
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FOR DISTRIBUTOR
Name Xxxxx Xxxxxx
----------------------------------------------------
Signature /s/ XXXXX XXXXXX
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Title CEO
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Date Oct. 27, 1994
----------------------------------------------------
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ADDENDUM I
To Symbol Technologies, Inc. Distribution Agreement between
Symbol Technologies, Inc. ("Symbol") and ScanSource, Inc. ("ScanSource"),
dated October 1, 1994
----------------
--------------------------------------------------------------------------------
This Addendum is attached and made an integral part of the above-referenced
agreement between the parties. All provisions and terms of the former remain in
effect, except as modified below:
I. PARAGRAPH 6 "PRICES":
--------------------
Distributor is entitled to Discount Level [*] in exchange for a commitment to
purchase and take delivery of at least $ [*] in Symbol products during the
term of the agreement. The discounts will be as set forth in the Distributor
Product and Discount Schedule for Level [*], plus [*] percent ([*]%) additional
discount for Category [*] products. Category [*] products remain at [*]%.
[*]
II. PARAGRAPH 7 "RETURN OF PRODUCT":
-------------------------------
[*]
Agreed to this date by the parties
FOR SYMBOL: FOR SCANSOURCE:
FOR SYMBOL
Name X. Xxxxxxxx Name Xxxxx Xxxxxx
---------------------------------- ---------------------------------
Signature/s/ X. XXXXXXXX Signature /s/ XXXXX XXXXXX
----------------------------- -----------------------------
Title Vice President Title CEO
--------------------------------- ---------------------------------
Date 10/29/94 Date Oct. 27, 1994
---------------------------------- ----------------------------------
* Redacted pursuant to application for confidential treatment.
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DISTRIBUTOR
+-------------------------------+
| PRODUCT AND DISCOUNT SCHEDULE |
+-------------------------------+
ATTACHMENT TO SYMBOL DISTRIBUTOR AGREEMENT
CATEGORY A: ALL HANDHELD BARCODE SCANNING PRODUCTS:
---------- --------------------------------------
XX0XXX, XX00XX, XX0XXX, XX00XX, HF2000
LSS24XX, LS9100, WK1780, WK2080
CATEGORY B: OTHER SCANNING PRODUCTS:*
---------- -----------------------
XX0XX, XX00XX, XX00XX, LS6XXX, PDF1000, PDF6000,
PL140, LL425 (SYSTEM), LS5000
PORTABLE TERMINALS
------------------
XXX00XX, XXX0000*, XXX00XX*, XXX*, XXX0000, LDT3805,
PRC3310, VRC3910, LRT3800, APS3395, DATAWANDS*
CATEGORY C: DATA MANAGEMENT PRODUCTS, PEN-BASED TERMINALS,
---------- -----------------------------------------------
ACCESSORIES, PERIPHERALS, & CABLES
----------------------------------
PPT4100, LS5100, LS5200, DM8XX, LL7XX, MS7X, WANDS, POWER
SUPPLIES, PS100X*, RF BASE STATIONS, NETWORK CONTROLLERS,
CRADLES, ADAPTORS, ACCESSORIES, SCAN STANDS, INTELLISTANDS,
SMART STANDS, TRANSCEIVERS, LL425 CABLE, TRAINING COURSES &
VIDEOS
DEVELOPMENT SOFTWARE
--------------------
UBASIC, POWERGEN, LIBRARIES, PERFORM SOFTWARE, ETC.
LL500 USER DOCUMENTATION, SERIES 3000ADK
CATEGORY D: APPLICATION SOFTWARE & OEM PRODUCTS*
---------- -----------------------------------
ALL THIRD PARTY APPLICATIONS* Products designated with an
asterisk have a 90 day warranty to end user. All others are
warranted for one year.
+-----------------------------------------------------------------------------+
| DISTRIBUTOR DISCOUNT SCHEDULE |
| DISCOUNT FROM LIST PRICE (PERCENT) |
| |
| DISC CERT. MINIMUM CREDIT ANNUAL PRODUCT CATEGORY |
| LEVEL LEVEL LIMIT REQUIRED VOLUME (000'S) A B C D |
| ----- ----- -------------- -------------- - - - - |
| 6 5C $105,000 2,000 - 3,999 [*] [*] [*] [*] |
| |
| 7 6C $215,000 OVER 4,000 [*] [*] [*] [*] |
| |
| - 7C $21,5000 OVER 4,000 [*] [*] [*] [*] |
| |
| 8 OVER 6,000 [*] |
+-----------------------------------------------------------------------------+
* Redacted pursuant to application for confidential treatment.
7
EXHIBIT D
SYMBOL TECHNOLOGIES, INC.
VALUE ADDED RESELLER AGREEMENT
+---------------------------------+
| Cooperative Marketing Partner |
| REFERRAL FEE PAYMENT SCHEDULE |
+---------------------------------+
The following referral fee payment rates are in effect for qualifying conditions
set forth in paragraph 4 of the Value Added Reseller Agreement for VARS or in
the Cooperative Marketing Partner (CMP) Agreement for CMP's. Conditions for
earning such referral fees are set forth therein. Symbol reserves the right to
change all fees in Exhibit D without notice.
+------------------------------------------------------------------+
| |
| Discount provided Referral Fee Amount Earned as |
| to End-user by Symbol a % of Net Cost to End-user |
| --------------------- ----------------------------- |
| 0-10% [*] |
| ----------------------------------------------------- |
| 11-20% [*] |
| ----------------------------------------------------- |
| 21-30% [*] |
| ----------------------------------------------------- |
| 31-40% [*] |
| ----------------------------------------------------- |
| 41-50% [*] |
| ----------------------------------------------------- |
| >50% [*] |
+------------------------------------------------------------------+
* Redacted pursuant to application for confidential treatment.
8
