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EXHIBIT 10.7
XXXX MICROPRODUCTS, INC.
HARDWARE DISTRIBUTION AGREEMENT
This Agreement, made this 10 day of October, 1996, is by and between Xxxx
Microproducts, Inc. ("Distributor"), a California Corporation having its
principal place of business at 0000 Xxxxxxxx Xxxxxx, Xxx Xxxx 00000-0000, and
Sage Inc. ("Vendor"), a California Corporation having its principal place of
business at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx, 00000.
RECITALS
Vendor manufactures, produces and/or supplies computer products and desires to
grant to Distributor the right to sell and distribute the products, as
hereinafter defined, upon the terms and conditions set forth below.
Distributor is engaged in the sale and distribution of computer products and
desires to have the right to sell and distribute Vendor's products and upon
said terms and conditions.
In consideration of the mutual covenants and agreements set forth below, the
parties hereto agree as follows:
1. RECITALS
The recitals stated above are incorporated herein by reference.
2. GRANT OF DISTRIBUTION RIGHTS
2.1 Vendor hereby grants to Distributor, and Distributor accepts, the
non-exclusive right to distribute in the geographic regions
("Territory") and to customers ("Customers") as defined in Exhibit A,
attached hereto, all computer products ("Product" or "Products")
listed on Exhibit B, attached hereto and made a part hereof, as
amended from time to time by mutual written agreement.
2.2 Vendor agrees to make available and to sell to Distributor such
Product as Distributor shall order from Vendor at the prices and
subject to the terms set forth in this Agreement. Vendor reserves the
right at any time to change, modify or discontinue any Product, model,
type or design furnished hereunder. In addition, Vendor reserves the
right to change its published Distributors' Price for any Product at
any time.
2.3 Vendor may appoint other distributors to distribute its Products.
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3. TERM
The term of this Agreement shall be for a period of one (1) year, beginning
on the date first above written. Thereafter, the Agreement shall be renewed
for successive terms of one (1) year without further notice unless
terminated sooner as provided under the provisions of the Agreement.
4. OBLIGATIONS OF VENDOR
4.1 Vendor shall use its best efforts to ship Product promptly after
receipt of Distributor's Purchase Order for Product, unless otherwise
directed by Distributor.
4.2 At the time of initial order and from time to time thereafter, Vendor
shall provide at no charge reasonable amounts of sales literature,
which amounts shall be solely determined by Vendor.
4.3 For each Product shipment to Distributor, Vendor shall issue to
Distributor an invoice showing Distributor's Purchase Order number and
Product part number, description, price and any discount. At
Distributor's request, Vendor shall provide Distributor with a current
statement of account, listing all invoices outstanding and any
payments made and credits given since the date of the previous
statement, if any.
5. OBLIGATIONS OF DISTRIBUTOR
5.1 Distributor must submit written Purchase Orders (which may be
transmitted via facsimile) for all Products purchased under this
Agreement. Purchase Orders must specify Product model numbers,
quantity ordered, shipping destinations, shipping dates and preferred
carrier (if any). All such Purchase Orders are subject to the terms
and conditions set forth in this Agreement and in the attached Exhibit
C. Any terms or conditions which add to or differ from the terms and
conditions of this Agreement shall be invalid. Distributor agrees,
subject to Vendor's ability to supply Product(s), that Distributor
will carry a sufficient inventory of Product(s) to provide immediate
"off-the-shelf" delivery to Distributor's Customers, and that, upon
request, Distributor will make available to Vendor its current Product
inventory status.
5.2 Distributor will handle all Product returns from its Customers and
batch them for return to Vendor at regular intervals.
5.3 Distributor agrees to consistently use best efforts to market, sell,
promote and otherwise encourage the purchase of Products by Customers.
Distributor shall factually present Products in terms of function and
performance, and conduct its business in a manner reflecting favorably
upon Vendor's valuable good will and reputation. Distributor further
agrees to display, demonstrate and market Products prominently and
favorably in comparison with other competitive products.
5.4 Distributor will maintain sufficient facilities, personnel and
demonstration units of Products so as to be able to effective
demonstrate Products. Vendor agrees to provide technical assistance on
an ongoing basis to its Customers. Distributor will make its
facilities available for Product training and support, with the
assistance of Vendor.
5.5 Distributor agrees to provide to Vendor sell-through data, including
customer name, address, and Product type for each Product within
fifteen (15) days of the end of each month.
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6. PRICE AND TERMS
6.1 The net price (excluding taxes, duties, freight charges and insurance)
for Products sold by Vendor to Distributor shall be Vendor's
Distributors' Price appearing in effect on the date Vendor receives
Distributor's Purchase Order. Vendor may change the Distributor's
Price of any or all of its Products with thirty (30) days written
notice.
6.2 In the event that Vendor increases its published Distributors' Price
for any Product which Distributor is authorized to resell, only
Purchase Orders previously accepted by Vendor will be invoiced at the
lower price. All new Purchase Orders will be subject to the price
increase.
6.3 In the event that Vendor decreases its published Distributors' Price
for any Product which Distributor is authorized to resell, Vendor will
apply "Price Protection" to any Purchase Order in process, and to any
Product which is in Distributor's inventory at the time of the price
decrease, with the following restrictions:
(i) Products in inventory must have been purchased directly from
Vendor. Vendor reserves the right to verify Price Protection
claims and audit inventory at Distributor's sites;
(ii) Only Product(s) with invoices issued within the previous one
hundred eighty (180) days will be protected;
(iii) Distributor must present a written request for credit within
thirty (30) days of the price decrease, including the serial
numbers of Product(s) affected; and
(iv) Once Price Protection is approved by Vendor, Distributor must
submit a Purchase Order for Product(s) with a dollar value equal
to or greater than the price protection credit total.
7. SHIPPING
Vendor shall ship Product only pursuant to Distributor Purchase Orders
received by Vendor. Product shall be shipped F.O.B. Vendor's warehouse,
with risk of loss or damage as set forth in Standard Terms and Conditions,
Exhibit C, Section 9, attached hereto. Further, Vendor's standard shipping
and handling charges, as set forth in Standard Terms and Conditions,
Exhibit C, Section 9, attached hereto and amended from time to time, shall
apply to all Purchase Orders.
8. CANCELLATIONS
Distributor may, without charge, cancel any Products on order, provided
that Vendor receives written confirmation of such cancellation at least
two (2) days prior to the original scheduled shipment date.
9. PROMOTIONAL ACTIVITIES
9.1 Distributor may advertise and promote Product ("Promotional
Activities") in a commercially reasonable manner and may use Vendor's
trademarks, service marks and trade name in connection therewith;
provided that Distributor shall submit the advertisement or promotion
to Vendor for review and approval prior to the occurrence of the
promotion, which approval shall not be unreasonably withheld or
delayed. Vendor retains all rights, title and interest in its trade
xxxx, and all use by Distributor of such trademarks inures to
Vendor's benefit.
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9.2 Vendor agrees to cooperate with Distributor in Promotional Activities
and hereby grants Distributor a Cooperative Promotion Allowance
("CPA"). Vendor shall accrue the CPA at a rate of two percent (2.0%)
of invoice amounts for Product purchased from Vendor and paid by
Distributor, excluding shipping, handling, taxes and the like, and
adjusted for credits.
9.3 Distributor shall use the CPA for Promotional Activities such as, but
not limited to, seminars, print advertising and direct mail, which
prominently and positively feature Products. Upon receipt of
reasonable evidence of such expenditures, Vendor will debit the full
amount of qualifying expenditures from the CPA accrued to date by
Distributor, and Vendor will credit the same amount against Vendor's
account.
9.4 CPA credits must be used within twelve (12) months of accrual or be
lost by Distributor.
10. STOCK ROTATION
Distributor may return Products which Distributor has previously taken
delivery of subject to the following conditions:
10.1 Stock rotation may occur in the months of March, June, September and
December.
10.2 Product must have been purchased directly from Vendor and must be in
restockable and salable condition, including their original Vendor
packaging.
10.3 Distributor will be credited for any amounts previously paid by
Distributor for Products thus returned, less any Price Protection or
other credits previously received for such Product.
10.4 Credit received for Stock Rotation may only be applied by Distributor
against a corresponding Purchase Order for delivery of equal or
greater value than the credit.
10.5 The total value of such returns may not exceed twenty five percent
(25%) of the total value of Products purchased during the prior three
(3) months.
11. PRODUCT WARRANTIES
Vendor warrants its Products as set forth in Standard Terms and Conditions,
Exhibit C, Section 5 attached hereto. Vendor has no obligation to provide
loaner Products to Distributor while any Product is being repaired, either
under warranty or out of warranty. Distributor may provide its customers
with loaners; however, it shall do so entirely at its own expense. Vendors
shall use its best efforts to repair and return the Product within thirty
(30) days of receipt.
12. INDEMNITY
12.1 Vendor shall defend, indemnify, and hold Distributor harmless from and
against any claims, demands, liabilities or expenses (including
attorney's fees and costs) for any injury or damage, including, but
not limited to, any personal or bodily injury or property damage,
arising out of or resulting in any way from any defect in Products.
This duty to indemnify Distributor shall be in addition to the
warranty obligations of Vendor.
12.2 Vendor shall indemnify and hold Distributor harmless from and against
all damages and costs incurred by Distributor arising from the
infringement of any U.S. or Canadian patents, copyrights or trademarks
as set forth in Standard Terms and Conditions, Exhibit C, Section 6
attached hereto.
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12.3 In any event of indemnification, Distributor will give prompt notice
of any claim to Vendor. Vendor will have sole authority to defend and
settle claims. Distributor will cooperate fully with Vendor in helping
it defend itself against such claim, provided Vendor reimburses
Distributor for any reasonable expenses associated with such
cooperation.
13. REPRESENTATIONS AND WARRANTIES
Vendor warrants and represents that Products and their use do not infringe
upon any patents, copyright or trademarks of others, and that there are not
any suits or proceedings pending or threatened which allege that any
Product or the use thereof infringes upon such patents, copyrights or
trademarks. Vendor further warrants that sales to Distributor of Product at
the listed prices and/or discounts do not in any way constitute violations
of federal, state or local laws, ordinances, rules or regulations,
including any anti-trust laws or trade regulations.
14. TERMINATION
14.1 Either party may terminate this Agreement, with or without cause, by
giving ninety (90) days written notice to the other party. Both
parties have considered the making of expenditures in preparing for
performance under this Agreement, and losses possibly resulting to
each in the event of its termination. As a result, neither party shall
be responsible to the other for damages or otherwise by reason of such
termination of this Agreement, except as explicitly provided for
elsewhere in this Agreement.
14.2 In the event Distributor materially breaches this Agreement (e.g.,
including without limitation, becomes delinquent in payment of its
obligations, misrepresents Vendor's Product(s), fails to adequately
support Vendor's Product(s), conducts its business in a fashion that
damages Vendor's valuable good will and reputation, breaches the
Confidential Information Agreement executed herewith) and such breach
continues for thirty (30) days after written notice to Distributor,
then Distributor agrees that Vendor may terminate this Agreement with
cause.
14.3 Distributor may terminate this Agreement if Vendor materially breaches
its obligations herein and such breach continues for thirty (30) days
after written notice of such breach to Vendor.
14.4 This Agreement shall immediately terminate if either party ceases
conducting business in the normal course, becomes insolvent, makes a
general assignment for the benefit of creditors, suffers or permits
the appointment of a receiver for its business or assets, or avails
itself of or becomes subject to any proceeding under the Federal
Bankruptcy Act or any other federal or state statute relating to
insolvency or the protection of rights of creditors.
14.5 Upon termination of this Agreement, with or without cause, Vendor will
purchase at Distributor's invoiced cost all new and unused product in
Distributor's inventory.
14.6 Distributor warrants that on or before the effective date of
termination of this Agreement all identifying signs, literature, logos
or other evidence linking Distributor and Vendor shall be returned to
Vendor or a process started to discontinue use thereof.
15. OTHER PROVISION
15.1 Construction
This Agreement shall be construed and enforced in accordance with the
laws of the State of California.
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15.2 Notices
All notices, requests, demands and other communications called for or
contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered or two (2) days after mailing by
U.S. certified or registered first-class mail, prepaid and addressed
to the parties at the addresses set forth at the beginning of this
Agreement or at such other addresses as the parties may designate by
written notice.
15.3 Attorney's Fees
In the event suit is commence to enforce this Agreement or otherwise
relating to this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and costs incurred in connection
therewith.
15.4 Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute on and the same instrument. However, this Agreement shall
be of no force or effect until executed by both parties.
15.5 Confidential Information
Neither party shall disclose to the other any information regarded as
confidential information by the disclosing party or any third party.
Any confidential disclosures shall be exclusively governed by a
separate agreement.
15.6 No Implied Waivers
The failure of either party at any time to required performance by
the other party of any provision hereof shall not affect in any way
the full rights to require such performance at any time thereafter.
The waiver by either party of a breach of any provision hereof shall
not be taken, construed or held to be a waiver of the provision
itself or a waiver of any breach thereafter or any other provision
hereof.
15.7 Captions and Section Headings
Captions and section headings used herein are for convenience only,
are not a part of this agreement, and shall not be used in construing
it.
15.8 Covenant of Further Cooperation
Each of the parties agrees to execute and deliver such further
documents and to cooperate in such a manner as may be necessary to
implement and give effect to the agreements contained herein.
15.9 Binding on Heirs, Successors and Permitted Assigns
This Agreement shall be binding upon and shall inure to the benefit
of each party, its successors and assigns. The permitted assigns
shall be a parent company, wholly-owned subsidiary or any entity that
merges with or acquires all of the assets or stock of the party.
15.10 Severability
A judicial determination that any provision of this Agreement is
invalid in whole or in part shall not affect the enforceability of
those provisions found to be valid.
15.11 Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof, superseding any and
all previous proposals, representation or statements, oral or
written. Any previous agreements between the parties pertaining to
the subject matter of this Agreement shall supersede the terms of any
invoice or Purchase Order issued by either party. Any modifications
to this Agreement must be in writing and signed by authorized
representatives of both parties hereto.
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16. ARBITRATION
All disputes, questions, controversies, claims or damages arising between
the parties hereto, or in relation to, or in connection with this
Agreement, or for breach thereof shall finally be settled by arbitration
pursuant to the rules of the American Arbitration Association by which each
party hereto is bound. Judgment upon the award of the arbitrators may be
entered in any court having jurisdiction thereof. Such arbitration shall be
held solely in San Jose, California, U.S.A.
17. LIMITATION OF LIABILITY
The standard warranty constitutes the sole and exclusive remedy against
Vendor for the furnishing of non-conforming or defective goods and
infringing goods. In no event, including if the goods are non-conforming,
defective, infringing, delayed or not delivered, shall Vender be liable for
any special, contingent, incidental, indirect or consequential damages,
even if Vendor has been advised of the possibility of such damage, whether
under a contract, tort, property or other legal theory. Such damages for
which Vendor is not responsible, include but are not limited to,
anticipated profits, labor expended, delays, loss of use and good will.
18. PARTIES EXECUTING
The parties executing this Agreement warrant that they have the requisite
authority to do so.
IN WITNESS WHEREOF, the parties set forth below their consent to the terms of
the Agreement through the signatures of their duly authorized representatives.
Xxxx Microproducts, Inc. Sage Inc.
By: /s/ XXXX XXXXXXX By: /s/ XXXXX X. XXXXX
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Name: XXXX XXXXXXX Name: XXXXX X. XXXXX
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Title: SR V-P of MKTING Title: VP-MKTG & SALES
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Date: 10-3-96 Date: 10/8/96
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The Exhibits to this Agreement are:
Exhibit A: Territory and Customers
Exhibit B: Vendor Products
Exhibit C: Standard Terms and Conditions of Sale
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EXHIBIT A
Territory: U.S.A., and International excluding Europe
Customers: Resellers and End Users
A-1
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EXHIBIT B
Vendor Products
B-1
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EXHIBIT C
STANDARD TERMS AND CONDITIONS OF SALE
1. CONTROLLING DOCUMENT
The acceptance of Distributor's Purchase Order is expressly made
conditional on Distributor's consent to the terms and conditions set
forth therein. Vendor agrees to furnish the goods covered thereby upon
these terms and conditions.
2. PRICES AND TAXES
Prices shown are for delivery of goods F.O.B. Vendor's warehouse. Any
manufacturer's sales, use or excise tax, or customs or inspection fee
shall be paid by Distributor. In the event Vendor is required to pay any
such tax, fee or charge, Distributor shall within thirty (30) business
days reimburse Vendor thereof.
3. DELIVERY AND DELAY
Delivery of goods to a carrier at Vendor's plant or other loading point
shall constitute delivery to Distributor. All risk of loss or damage of
Product(s) in transit are borne by Distributor. Any partial deliveries
shall be separately invoiced and paid for when due per invoice without
regard to following deliveries. Claims for shortages or errors in
delivery must be made in writing to Vendor within ten (10) days after
receipt of shipment. Vendor shall not be liable for any loss or damage as
a result of any delay due to any cause beyond Vendor's direct reasonable
control.
4. INSPECTION
Distributor shall examine all goods promptly upon receipt thereof. Within
ten (10) days of such receipt, Distributor shall notify Vendor in writing
of all claimed shortages and defects and, if a rejection is intended, a
specification on the grounds thereof. Otherwise, the goods will be deemed
accepted as of the date of shipment.
5. LIMITED WARRANTY
Vendor warrants articles of its manufacture (excluding computer cables),
used under normal operating conditions against defective materials or
workmanship for the shorter of (i) twelve (12) months from the sale of
Product by Distributor, or (ii) fifteen (15) months from the date of
shipment from Vendor to Distributor. The liability of Vendor under this
warranty is limited, at Vendor's option, solely to repair or replace with
equivalent articles, or to provide an appropriate credit adjustment not
to exceed the sale price to Distributor, provided that the defective
articles are returned to Vendor, transportation charges prepaid, and
Vendor's examination of such article discloses to its satisfaction that
defects were not caused by negligence, misuse, improper installation,
accident or unauthorized repair or alteration. Warranty claims will only
be honored if Vendor is promptly notified in writing of the details of
the claim and Vendor has issued a Returns Materials Authorization ("RMA")
number to Distributor.
THIS WARRANTY IS EXPRESSLY IN LIEU OF AND VENDOR HEREBY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE, AND OF ALL OTHER
OBLIGATIONS OR LIABILITIES ON VENDOR'S PART RELATING TO ANY ALLEGEDLY
DEFECTIVE PRODUCT, AND VENDOR NEITHER ASSUMES NOR AUTHORIZES ANY OTHER
PERSON TO ASSUME FOR VENDOR ANY OTHER LIABILITIES.
C-1
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Out-of-warranty Product(s) may be returned to Vendor for repair, provided
that Distributor requests and is issued an RMA number and provides
Vendor with a Purchase Order to cover the repair charges. Both in-bound
and out-bound freight charges for non-warranty repairs will be paid by
Distributor. Non-warranty repairs will be made at a specified repair rate
to be agreed to in writing by both parties and from time to time.
Distributor will be notified by Vendor if the Product is determined
non-repairable and request disposition from Distributor at that time.
6. INFRINGEMENT CLAIMS
Vendor shall indemnify and hold Distributor harmless with respect to all
liabilities, losses, costs and expenses including reasonable attorney's
fees in connection with claims resulting from any third party claim made
against Distributor for the infringement of United States patents,
copyrights mass works or other proprietary rights by goods Distributor
hereunder, except if the claimed infringement has resulted from Vendor's
compliance with Distributor's designs, specifications, and instructions,
provided that Distributor notifies Vendor in writing of the claim of
infringement within thirty (30) days of Distributor's notice thereof.
Vendor shall have the option at any time to modify any goods sold
hereunder to avoid allegations of infringement provided such modification
does not materially affect performance hereunder.
7. GOVERNMENT CONTRACTS
If any Purchase Order indicates that the purchase is being made for use
under a U.S. Government Contract, only those terms and conditions which
are made mandatory by federal statue or regulation for inclusion in fixed
price supply subcontracts covering standard commercial proprietary items
sold to the public shall be deemed incorporated herein by reference.
Vendor retains the sole right to accept or reject such Purchase Orders.
8. TERMS AND METHOD OF PAYMENT
Where Vendor has extended credit to Distributor, the terms of payment
shall be 2% Net Ten (10) or Net Thirty (30) days from date of invoice.
The amount of credit, if any, may be changed or credit may be withdrawn
by Vendor at any time. On any order on which credit is not extended by
Vendor, shipment or delivery shall be made at Vendor's election, Cash
with Order or C.O.D.
9. SHIPPING AND HANDLING
Distributor may select from any of the normal shipping modes offered by
United Parcel Service ("UPS") or Federal Express ("FedEx") for delivery
of Product(s). Unless otherwise requested by Distributor, all shipment of
Product(s) by Vendor will be made via UPS Ground. Vendor will invoice
Distributor for shipping costs incurred by the common carrier. Vendor
reserves the right to change its charges for shipping and handling from
time to time without prior notice.
C-2
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Xxxx Microproducts
0000 Xxxxxxxx Xxx.
Xxx Xxxx, XX 00000-0000
Distributor Agreement Addendum
Xxxx Microproducts - Sage Inc.
Rev. 1.0 Sept. 12, 1996
Date of Agreement: _________________________
New Address: Sage Inc.
0000 Xxx Xxxxxxxxx Xx. #000
Xxxxx Xxxxx, XX 00000
PH: (000) 000-0000 FAX: (000) 000-0000
Lead Time:
Sage, Inc. standard lead time is 4 weeks ARO. However, Sage Inc. shall use its
best efforts to ship the product within 15 working days after receipt of Xxxx
Micro's forecasted quantity for the product.
Minimum Orders:
Xxxx Micro will provide SAGE INC. a minimum board orders as follows:
1) Minimum Bare Board order = 100 units
2) Minimum kit order per line item = 50 units
Forecast:
Xxxx Micro will provide SAGE INC. a forecast of the stocking board and display
kits volume every (calendar) quarter.
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Sage Inc. Xxxx Microproducts
0000 Xxx Xxxxxxxxx Xx. #000 0000 Xxxxxxxx Xxx.
Xxxxx Xxxxx, XX 00000 Xxx Xxxx, XX 00000-0000
By: /s/ XXXXX X. XXXXX By: /s/ XXXX XXXXXXX
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Name: XXXXX X. XXXXX Name: XXXX XXXXXXX
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Title: Vice President - MKTG & SALES Title: SR VP-MKTG
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Date: 10/8/96 Date: 10-3-96
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