EXHIBIT 10.20
DISTRIBUTION AGREEMENT
THIS Distribution AGREEMENT ("Agreement") is entered into this 25th day of
February 1997 by and between XXXXXX MICRO INC. ("Ingram"), a Delaware
corporation having its principal place of business at 0000 X. Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000, and OSICOM TECHNOLOGIES, INC. ("Vendor"), a
California corporation having its principal place of business at 00000 Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000. The parties desire to and hereby do enter into
a distributor/supplier relationship, the governing term and mutual promises of
which are set out in this Agreement.
1. DISTRIBUTION RIGHTS
1.1 Territory Vendor grants to Ingram, including its affiliates for resale, and
Ingram accepts, the non-exclusive right to distribute worldwide all computer
products produced and for offered by Vendor ("Product") during the term of this
Agreement Ingram shall have the right to purchase, sell and ship to any reseller
within the territory or to Xxxxxx'x affiliate, or at Vendor's option Xxxxxx'x
affiliate may purchase direct from Vendor.
1.2 Product Vendor agrees to make available and to sell to Ingram such Product
as Ingram shall order from Vendor at the prices and subject to the terms set
forth in this Agreement Ingram shall not be required to purchase any minimum
amount or quantity of the Product
2. TERM AND TERMINATION
2.1 Term. The initial tem of this Agreement is one (1) year. Thereafter the
Agreement will automatically renew for successive one (1) year terms unless it
is earlier terminated.
2.2 Termination
(a) Either party may terminate this Agreement, with or without cause, by
giving thirty (30) days written notice to the other party.
(b) Either party may immediately terminate this Agreement with written
notice if the other party:
(i) materially breaches my term of this Agreement and such breach
continues for thirty (30) business days after written notification
thereof; or
(ii) ceases to conduct 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 any Bankruptcy
Act or any other federal or state statute relating to insolvency or the
protection of rights of creditors; or
(iii) attempts to assign or otherwise transfer its rights hereunder unless
both have agreed in writing to such assignment or transfer.
3. INGRAM OBLIGATIONS
3.1 Product Availability Ingram will list Product in its catalog(s) as
appropriate and endeavor to make such Product available to customers.
3.2 Advertising Ingram will advertise and/or promote Product in a commercially
reasonable manner and will transmit as reasonably necessary Product information
and promotional materials to its customers-
3.3 Support Ingram will make its facilities reasonably available for Vendor and
will assist in Product training and support. Ingram will provide reasonable,
general Product technical assistance to its customers, and will direct all other
technical issues directly to Vendor.
3.4 Administration
(a) Upon request Ingram will furnish Vendor with a valid tax exemption
certificate.
(b) Ingram will provide Vendor standard sales-out and inventory reports
via its electronic Bulletin Board System.
(c) Xxxxxx may handle its customers' Product returns by batching them for
return to Vendor at regular intervals.
4. VENDOR OBLIGATIONS
4.1 Shipping/Export
(a) vendor shall ship Product pursuant to Ingram purchase, order(s)
("P.O."). Product shall be Shipped F.O.B. Xxxxxx'x designated warehouse with
risk of less or damage to pass to Ingram upon delivery to the warehouse
specified in Ingram P.O.
(b) Ingram requires concurrent with the execution of this Agreement Export
Administration Regulations product classification and supporting documentation:
Certificate of Origin (General Use and/or NAFTA), Export Commodity Control
Number's; (ECCN's), General License and/or Individual Validated License
information and Schedule "B"/Harmonized Numbers. This applies when distribution
rights granted under Section 1.1 are outside the United States for the initial,
Product/s and when additions or changes to these Products occurs.
4.2 Invoicing For each Product shipment to Ingram, Vendor shall issue to Ingram
an invoice showing Xxxxxx'x order number, the Product part number, description,
price and any discount. At least monthly, Vendor shall provide Ingram with a
current statement of account, listing all invoices outstanding and any payments
made and credits given since the date of the previous statement.
4.3 Product Availability Vendor agrees to maintain sufficient Product inventory
to fill Xxxxxx'x orders. If a shortage of any Product exists Vendor agrees to
allocate its available inventory of such Product to Ingram in proportion to
Xxxxxx'x percentage of all of Vendor's customer orders for such Product during
the previous sixty (60) days.
4.4 Product Marking Vendor will clearly xxxx each unit of Product with the
Product name and computer compatibility. Such packaging will also bear a
machine-readable bar code identifier scannable in standard Uniform Product Code
(UPC) format. The bar code must identify the Product as specified by the Uniform
Code Council (UCC). If the Vendor or Ingram customers' require serial number
tracking the serial number must be clearly marked and bar coded on the
outside of the individual selling unit. The bar code shall fully comply with all
conditions regarding standard product labeling set forth in Exhibit B in the
then-current Ingram Guide to Bar Code: The Product Label. Vendor may be assessed
a reasonable per unit charge for all Product not in conformance herewith.
4.5 Product Notes Vendor will either within thirty (30) days provide product
note information in accordance with Xxxxxx'x specifications noted in Exhibit C
or instruct Ingram to do so in which case a charge per SKU will apply.
4.6 Support
(a) At no charge to Ingram, Vendor shall support Product and any
reasonable Ingram efforts to sell Product. Vendor shall also provide to Ingram,
its employees, and its customers reasonable amounts of sales literature,
advertising materials, and training and support in Product sales.
(b) Vendor shall assume all current and outstanding obligations under the
following Agreements incorporated herein as if fully set forth:
Distribution Agreement dated June 7, 1994 between Xxxxxx Micro and Cray
Communications, Inc.
Distribution Agreement dated November 9, 1993 between Xxxxxx Micro and
Pacific Data Products
4.7 New Product Vendor shall endeavor to notify Ingram at least thirty (30) days
before the date any new product is introduced. Vendor shall make such Product
available for distribution by Ingram no later than the date it is first offered
for sale in the marketplace.
4.8 Insurance Vendor shall carry insurance coverage for Product
liability/completed operations with minimum limits of five million dollars
($5,000.000). Within ten (10) days of full execution of this Agreement, Vendor
shall provide Ingram with a Certificate of Insurance. This Certificate of
Insurance must include: (i) a broad form endorsement naming Ingram as an
additional insured, and (ii) a mandatory thirty (30) day notice to Ingrain of
insurance cancellation.
4.9 Warranties Certification
(a) General Warranty Vendor Represents and warrants that (i) it has good
transferable title to the Products, (ii) the Product will perform in
conformity with specifications and documentation supplied by Vendor, (iii)
the Product or its use does not infringe any patents, copyrights, trademarks,
trade secrets, or any other intellectual property rights, (iv) that there are
no suits or proceedings pending or threatened which allege any infringement
of such proprietary rights, and (v) the Product sales to Ingram do not in any
way constitute violations of any law, ordinance, rule or regulation in the
distribution territory.
(b) Warranty Vendor hereby represents and warrants that any Product offered for
distribution does not contain any obscene, defamatory or libelous matter or
violate any right of publicity or privacy.
(c) End-User Warranty Vendor shall provide a warranty statement with Product
for end user benefit. This warranty shall commence upon Product delivery to
end-user.
(d) Class B Warranty Vendor hereby represents and warrants that the
Product has been or will be at the time of shipment certified as a Class B
computing device as required by the rules of the U.S.A. Federal Communications
Commission ("FCC Rules").
(e) EU Warranty Vendor further warrants and represents for Products
distributed to the European Union ("EU") that the Products will be accepted
under all EU directives, regulations and the EU country's legislation.
(f) Made in America Certification Vendor by the execution of this
Agreement certifies that it will not label any of its products as being "Made in
America," "Made in U.S.A.," or with similar wording, unless all components or
elements of such Product is in fact made in the United States of America. Vendor
further agrees to defend, indemnify and hold harmless from and against any and
all claims, demands, liabilities, penalties, damages, judgments or expenses
(including attorney's fees and court costs) arising out of or resulting in any
way from Product that does not conform to the Certification.
5. PRICING
5.1 Ingram Pricing The suggested retail price and any Ingram discount for
Product is set out in Exhibit D. Vendor may modify Exhibit D with a minimum of
thirty (30) days advance written notice to Ingram. All Ingram orders for Product
will be billed at the price in effect when the order is placed. Ingram shall
have sole discretion as to selling price of Product to its customers.
5.2 Vendor Pricing Vendor agrees that the prices and terms it offers to Ingram
are now and will continue to be at least as low as those it offers to any of its
customers. If Vendor offers price discounts, promotional discounts or other
special prices to its other customers. Ingram shall also be entitled to
participate in and receive notice of the same no later than Vendor's other
customers.
5.3 International Pricing If Vendor offers a better price outside the U.S. and
Ingram has distribution rights in that territory then the same price shall be
offered to Ingram for Product sales into that territory.
5.4 Price Adjustments If Vendor reduces any Product price, or offers increased
discounts to any customers, Vendor will promptly credit Ingram for the
difference between the original Product price and the reduced Product price for
Xxxxxx'x and its customers' Product inventory, including: (i) any Customer
Product in-transit from/to Ingram, (ii) any unshipped orders, and (iii) orders
in-transit to Ingram on the price reduction or increased discount offer date. In
the event that Vendor shall raise the list price of a Product, all orders for
such Product placed prior to the effective date of the price increase shall be
invoiced at the lower price. Vendor shall provide Ingram with thirty (30) days
advance notice of any price increases.
5.5 Payment Terms Xxxxxx'x initial order payment terms shall be net
[sixty] [60] days. Subsequent order payment terms shall, be [two] percent [2%]
[10] days, net [forty-five (45)] days. Payment shall be deemed made on the
payment postmark date.
5.6 Right to withhold Notwithstanding any other provision in this Agreement to
the contrary, Ingram shall not be deemed in default if it withholds
any, specific amount to Vendor because of a legitimate dispute between the
parties as to that specific amount pending the timely resolution of the disputed
amount.
6. MARKETING
6.1 Trademarks Ingram may advertise and promote the Product and/or Vendor, and
may thereby use Vendor's trademarks, service marks and trade names. Neither
party shall acquire any rights in the trademarks, service marks or trade names
of the other.
6.2 Advertising Vendor agrees to cooperate in Xxxxxx'x or Xxxxxx'x customers'
advertising and promotion of Product and hereby grants Ingram a cooperative
advertising allowance [three] percent [3%] of Product invoice amount for such
advertising featuring Product and/or Vendor. Ingram shall submit advertising to
Vendor for review and approval prior to any initial release, and Vendor shall
not unreasonably withhold or delay such approval. Upon receipt of reasonable
evidence of such advertising expenditures, Vendor agrees to credit the amount
thereof future Ingram purchases.
6.3 Programs
(a) Vendor shall participate in Xxxxxx'x current "Imagine" program
marketing program and grants Ingram one point five seven percent (1.57%) of
Product invoice amount for this purpose- The cooperative advertising allowance
granted in Section 61 hereof shall be reduced accordingly by this amount.
Additionally, this program shall be subject to the provisions set forth in
Exhibit E.
(b) Xxxxxx may offer additional marketing program to Vendor including but
not limited to launch programs and reseller pass through opportunities. If
Vendor elects to participate, Vendor agrees to pay such additional funds as may
be required for this purpose.
(c) Vendor may be asked to prepay all marketing activities until a
mutually agreed upon sell through rate is achieved.
6.4 Support Product Vendor shall consign a reasonable amount or demonstration
Product to aid Ingram in its support and promotion of Product. All such
consigned Product will be returned to Vendor upon request.
7. RETURNS
7.1 Stock Balancing Notwithstanding anything herein to the contrary, Ingram may
return throughout the term any Products which are in their original packaging to
Vendor for full credit of the Products' purchase price. Vendor will pay all
freight charges for returned Products.
7.2 Post-Term Termination For one hundred eighty (180) days after the expiration
or earlier termination of this Agreement, Ingram my return to Vendor any Product
for credit against outstanding invoices, or if there are no outstanding invoices
for a cash refund. Any credit or refund due Ingram for returned Product shall be
equal to the Product purchase price plus all freight charges incurred by Ingram
in returning the Product.
7.3 Product Discontinuation Vendor shall give Ingram thirty (30) days' advance
written notice of product discontinuation. Ingram may return all such Product to
Vendor for full credit of Product purchase price plus all freight charges
incurred by Ingram in returning the Product.
7.4 Defective Product
(a) Ingram may return any Product to Vendor that Ingram or its Customer
finds defective. Vendor shall immediately credit Ingram for the Product purchase
price, plus all freight charges incurred by Ingram in returning the defective
Product-
(b) If any Product is recalled by Vendor because of defects, revisions or
upgrades, Ingram will, at Vendor's request, provide reasonable assistance with
the recall. Vendor will pay Xxxxxx'x expenses in connection with such recall.
8. INDEMNIFICATION
8.1 Product Indemnity Vendor shall defend, indemnify, and hold harmless Ingram
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 Ingram
shall be in addition to the warranty obligations of Vendor.
8.2 General Indemnity Each party shall indemnify defend and hold the other
harmless from and any and all claims, actions, damages, demands liabilities cost
and expenses, including reasonable attorney's fees and expenses, resulting from
any act or omission of the acting party or its employees under this Agreement,
that causes or results in property damage, personal injury or death.
8.3 Intellectual Properly Rights Indemnity Vendor shall defend, indemnify and
hold Ingram, its resellers and their customers, harmless from and against all
damages and costs incurred by any of them arising from the infringement of any
patent, copyright, trademark, trade secret or other proprietary right by xxxxx
of the manufacture sale, marketing, or use of Product.
8.4 Product Infringement Upon threat of claim of infringement, Vendor may, at
its expense and option (i) procure the right to continue using any part of
Product, (ii) replace the infringing Product with a non-infringing Product of
similar performance, or (iii) modify Product to make it non-infringing. If
Vendor does not so act within ninety (90) days after such claim, Ingram may
return Product to Vendor for a full credit against future purchases or for a
cash refund. at Xxxxxx'x option.
8.5 Multi-Media Jiidemn4i Vendor shall defend, indemnify and hold Ingram, its
resellers and their customers, harmless from and against all damages and costs
incurred by any of them to the extent it is based upon a claim *at the Product
either (i) violates a third party's right of publicity and/or right of privacy,
or (ii) contains any obscene, defamatory or libelous matter.
8.6 European Indemnity For products distributed to a country of the EU, the
Vendor accepts full responsibility for, and will indemnify Ingram for, all costs
and damages wising from any non-compliance with any manufacturer-directed EU
decree, regulation or directive.
8.7 Limitation of Liability NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOST
PROFITS OF BUSINESS, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES, WHETHER BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE), AND WHETHER OR NOT ADVISED OF THE POSSIBILITY Of
SUCH DAMAGES.
THIS LIMITATION IS IN NO WAY WANT TO LIMIT VENDORS LIABILITY FOR PERSONAL
INJURY OR DEATH AS A RESULT OF A DEFECT IN ANY PRODUCT IN THOSE JURISDICTIONS
WHERE THE LAW DOES NOT ALLOW THIS LIMITATION-
9. COMPLIANCE WITH FEDERAL LAWS AND REGULATIONS
9.1 Executive Order 11246 Vendor agrees to include the Equal Employment
Opportunity Clause by reference in every contract, agreement and purchase order
entered into with subcontractors or suppliers as required by 41 CFR 60-1.4.
9.2 Employer Information Report EEO-4/ Written Affirmative Action Program Vendor
agrees that if the value of any contract or purchase order is fifty thousand
dollars ($50,000) or more and the Vendor has fifty (50) or more employees,
Vendor will (i) file an EEO-1 report (Standard Form 100) and comply with and
file such other compliance reports as may be required under Executive Order
11246, as amended, and Rules and Regulations adopted thereunder and (ii) will
develop a written affirmative action compliance program for each of its
establishments as required by Title 41 CFR 60-1-40.
9.3 Veterans Employment Clause Vendor agrees to abide by and comply with the
provisions of the Affirmative Action Clause, 41 CFR 60-250.4.
9.4 Employment of Handicapped Persons Vendor agrees that it will abide by and
comply with the provisions of the Affirmative Action Clause, 41 CFR 60-741 A.
9.5 Small Business Concerns and Small Business Concerns Owned and Controlled by
Socially and Economically Disadvantage Individuals Where a government contract
is expected to exceed five hundred thousand dollars ($500,000), Vendor agrees to
comply with all requirements of P1- 95-507 and regulations promulgated
thereunder. Vendor shall comply with instructions contained in Exhibit F.
9.6 Women-owned Business Concerns Vendor shall comply with instructions
contained in Exhibit F. Where a government contract is expected to exceed five
hundred thousand dollars ($500,000), Vendor agrees to comply with all
requirements of Executive Order 12138 and all regulations promulgated
thereunder.
10. GOVERNMENT PROGRAM
10.1 Partnership America Vendor may, at its sole option, participate in Xxxxxx'x
government reseller program in which case the provisions of Exhibit G,
Partnership America, shall apply. A draft copy is provided solely for your
information and review.
11. GENERAL PROVISIONS
11.1 Notices Any notice which either party may desire to give the other party
must be in writing and may be given by (i) personal delivery to an officer of
the party, (ii)
by mailing the same by registered or certified mail, return receipt requested,
to the party to whom the party is directed at the address of such party as set
forth at the beginning of this Agreement. or such other address as the parties
may hereinafter designate, and (iii) by facsimile or telex communication
subsequently to be confirmed in writing pursuant to item (ii) herein.
11.2 Governing Law This Agreement shall be construed and enforced in accordance
with the laws of the State of California, except that body of law concerning
conflicts of law. The United Nations Convention on Contracts for the
International Sale of Goods shall not apply to this Agreement.
11.3 Cooperation Each party agrees to execute and deliver such further documents
and to cooperate as may be necessary to implement and give effect to the
provisions contained herein.
11.4 Force Majeure Neither party shall be liable to the other for any delay or
failure to perform, which results from causes outside its reasonable control.
11.5 Attorneys Fees In the event there is any dispute concerning the terms of
this Agreement or the performance of any party hereto pursuant to the terms of
this Agreement and any party hereto retains counsel for the purpose of enforcing
any of the provisions of this Agreement or asserting the terms of this Agreement
in defense of any suit filed against said party, each party shall be solely
responsible for its own costs and attorney's fees incurred in connection with
the dispute irrespective of whether or not a lawsuit is actually commenced or
prosecuted to conclusion.
11.6 Export Regulations Ingram agrees by the Purchase of Products to conform to,
and abide by, the export laws and regulations of the United States, including
but not limited to, the Export Administration Act of 1979 as amended and its
implementing regulations. Ingram shall include a statement in it's standard
sales terms and conditions that any shipment of Product outside the United
States will require a valid export license. Ingram further agrees to distribute
Product in accordance with the territory as defined in Section 1.1. Whenever a
EU country is specified as Territory under Section 1.1, Territory shall include
all EU countries.
12. AGREEMENT
12.1 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 one and the same instrument.
12.2 Section Head Section headings in this Agreement are for convenience only,
and shall not be used in construing the Agreement.
12.3 Incorporation of all Exhibits Each and every exhibit referred to
hereinabove and attached hereto is hereby incorporated herein by reference as if
set forth herein in full.
12.4 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.
12.5 No Implied Waivers If either party fails to require performance of any duty
hereunder by the other party, such failure shall not affect its right to require
performance of that or any other duty thereafter. The waiver by either party of
a breach of any provision of this Agreement shall not be a waiver of the
provision itself or a waiver of any breach thereafter, or a waiver of any other
provision herein.
12.6 Binding Effect/Assignment This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective
representatives, successors and permitted assigns. This Agreement shall not be
assignable by Vendor, without the express written consent of Ingram, which
consent shall not be unreasonably withheld, including to a Person in which it
has merged or which has otherwise succeeded to all or substantially all of such
party's business and assets to which this Agreement pertains and which has
assumed in writing or by operation of law its obligations under this Agreement.
Any attempted assignment in violation of this provision will be void.
12.7 Survival Sections 5.5 (Payment Terms), 5.6 (Right to Withhold), 7.2
(Post-Term Termination) and 8. (Indemnification) shall survive the expiration or
earlier termination of this Agreement.
12.8 End This Agreement constitutes the entire Agreement between the Parties
regarding its subject matter. This Agreement supersedes any and all previous
proposals, representations or statements, oral or written. Any previous
agreements between the parties pertaining to the subject matter of this
Agreement are expressly terminated. The term and conditions of each party's
purchase orders, invoice & acknowledgments/confirmations or similar documents
shall not apply to any order under this Agreement, and any such terms and
conditions on any such document are objected to without need of further notice
or objection. Any modifications to this Agreement must be in writing and signed
by authorized representative of both parties.
12.9 Authorized Representatives Either party's authorized representative for
execution of this Agreement or any amendment hereto shall be president, a
partner, or a duly authorized vice-president of their respective party. The
parties executing this Agreement warrant that they have the requisite authority
to do so.
IN WITNESS WHEREOF, the parties hereunto have executed this Agreement.
"Ingram" "Vendor"
Xxxxxx Micro Inc. Osicom Technologies, Inc.
0000 X. Xx. Xxxxxx Xxxxx 00000 Xxxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000 Xxxxxxxx, XX 00000
Name: /s/ Xxxxxx Xxxxxx Name: /s/ Xxxx Xxxxx
Title: VP, Purchasing Title: President
Date: February 27, 1997 Date: February 26, 1996
*AGREEMENT MUST BE SIGNED BY PRESIDENT OR BY A DULY AUTHORIZED VICE PRESIDENT OR
PARTNER.
EXHIBITS:
A Vendor Routing Guide (if applicable)
B Guide to Bar Code: The Product Label
C Product Notes
D Product Price List
E "IMAGINE" Program
F Small And Disadvantaged Business Certification
G Partnership America
