EXHIBIT 10.5
COMPUTER SOFTWARE
DISTRIBUTION AGREEMENT
This Agreement is made and is effective as of the 29th day of April 1999, by and
between Navarre Corporation ("Navarre") of 0000 00xx Xxxxxx Xxxxx, Xxx Xxxx,
Xxxxxxxxx, 00000 and Softlink of 0000 Xxxxxxx Xxxxxxx Xxxx., Xxxxx 000, Xxxxx
Xxxxx, Xxxxxxxxxx 00000 (Vendor")
The Parties have agreed as follows.
1 DEFINITIONS
1.1 The term "Product(s)" shall mean all computer software and related products
manufactured or marketed by Vendor during the term of this Agreement.
1.2 The term "Dealer(s)" shall mean any third party or entity to which Navarre
markets any Products for remarketing.
2. GRANT OF MARKETING RIGHTS
2.1 Vendor grants to Navarre and Navarre accepts from Vendor the right to
purchase Products and to market and distribute Products to Customers in the
United States and Canada, unless other territories are approved in writing.
This grant is non-exclusive unless otherwise agreed to by the parties.
3. TERM
3.1 The initial term of this Agreement shall be for a period of eighteen (18)
months, unless sooner terminated as provided by this Agreement.
3.2 After the initial term, this Agreement shall be automatically renewed for
successive one (1) year periods, unless either party gives the other
written notice, at least ninety (90) days prior to the expiration of the
then current contract period that it does not desire that the Agreement
continue. If such notice is given, the Agreement shall terminate at the end
of the then current term.
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4. ORDERS AND SHIPMENT AND DELIVERY OF PRODUCTS
4.1 Navarre shall issue orders in writing (which includes facsimile
transmission.)
4.2 Vendor shall deliver all products ordered by Navarre within the time agreed
to.
4.3 All Products shall be shipped freight paid by Vendor, F.O.B. destination.
4.4 Navarre may cancel all or part of any order prior to the date of shipment.
4.5 Navarre shall have the option to accept or reject any partial shipments.
4.6 A packing list showing Navarre's purchase order number, quantity ordered,
quantity shipped and a detailed identification of the Products must
accompany all shipments. Each carton needs to include P.O. description, UPC
and carton quantities.
4.7 All Products shall bear a UPC part code (sell code), and all shipping
cartons shall contain a UPC shipping code (ship unit) [UPC number and bar
code.] The UPC numbers and codes on Products and shipping cartons shall
conform to the Uniform Code Council, National Office Products Association
and Retail Industry Standards.
4.8 Vendor agrees master carton quantities shall match those originally
provided by Vendor, unless any changes are notified five (5) days before
shipment. Thereafter, any customer penalties and/or Navarre costs of rework
will be charged back to Vendor.
4.9 Navarre has the right to charge back to Vendor costs incurred by Navarre or
its Customers due to missing, defective or inaccurate UPC codes.
5. PURCHASE PRICE
5.1. Vendor represents and warrants that the price, discounts, payment terms and
return provisions set forth with respect to any Product shall never be less
favorable to Navarre than those made available by Vendor to any other
purchasers of such Product, within same class of trade. Vendor agrees that
if such a sale occurs, Vendor will sell the Product to Navarre at the same
terms and reimburse Navarre retroactively from the date of such sale for
the difference.
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5.2 Navarre has the option to add any or all future retail products
manufactured or marketed by Vendor. The Navarre price and the suggested
retail price for any new release may only be increased by sixty (60) days
advance written notice given by Vendor to Navarre.
5.3 Any announced or published price decrease by Vendor shall apply to Navarre
orders shipped on or after the date the price decrease was announced or
published. In addition, Vendor shall credit to Navarre an amount equal to
the difference between the old cost to Navarre for a Product and the new
cost, times the total number of units of the Product held in Navarre's
inventory, defined as current on hand inventory; units sold within five (5)
working days of price protection notification, and in-transit returns. A
similar credit shall be made available for all affected Product held by
Navarre's Customers at the time of a price decrease. Vendor shall provide
credit for all Product effected by the price decrease, as identified above,
within fifteen (15) days of receipt of Navarre's supporting documentation.
6. PAYMENT
6.1 On or after the date of shipment, Vendor shall invoice Navarre for the
purchase of Product. Initial purchase orders written from December 16th
through August 31st of any year shall be paid net ninety (90) days from the
receipt of the Products. Any other purchase orders written from December
16/th/ through August 31/st/ of any year shall be paid net sixty (60) days
from the receipt of the Products. Any purchase orders written from
September 1/st/ through December 15/th/ of any year shall be paid net one-
hundred twenty (120) days from the receipt of the Products. Navarre shall
have the option to deduct from invoices due Vendor any credits or money due
Navarre from Vendor. In case there is a balance due Navarre, Vendor shall
issue a check to Navarre, within thirty (30) days for the credit balance.
In case of a disputed account balance, both parties will make good faith
effort to reconcile account, within twenty-one (21) days.
7. STOCK BALANCING, RETURNS, PRODUCT RECALLS AND CREDITS
7.1 All defective inventory, either identified upon receipt from Vendor, or
determined to be defective when returned from Navarre's customers, will be
reported to Vendor. Vendor shall advise Navarre regarding the disposition
of defective inventory within twenty-one (21) days of return request.
Otherwise, the defective inventory will be destroyed. Vendor shall bear all
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expenses regarding the destruction or other disposition of defective
inventory and will issue an immediate credit to Navarre for the purchase
price plus all return freight charges for defective product.
7.2 Navarre may return for full credit up to 100% of all inventory received
from Vendor. Upon receipt of return authorization request, Vendor shall
provide a Return Authorization within seven (7) days of notice. Upon
receipt of such Product, Vendor shall credit Navarre's account with the
amount originally paid for the Product. Items delisted by Vendor
(discontinued and/or version changes) must be communicated in writing to
Navarre. Delisted items will be available for return with immediate and
full credit for a period no less than two hundred seventy (270) days.
7.3 Credits for products returns, advertising allowances or other credits
provided for by this Agreement will be handled by the issuance of charge
backs by Navarre, and the issuance of a credit memo by Vendor.
8. WARRANTIES, EXCLUSION OF CONSEQUENTIAL DAMAGES
8.1 Except as provided in Sections 7, 8 and 9 hereof, neither party shall,
under any circumstances, be liable to the other for consequential,
incidental, indirect or special damages arising out of or related to this
Agreement or the transactions contemplated herein, even if such party has
been appraised of the likelihood of such damages occurring.
9. INDEMNIFICATION
9.1 Vendor shall be solely responsible for the design, development, supply,
production and performance of the Products. Vendor agrees to indemnify and
hold Navarre harmless from and against any claim, loss, damage, expense or
liability (including legal fees and costs) that may result, in whole or in
part, from:
A. Any infringement, or any claim of infringement of any patent,
trademark, copyright, trade secret or other proprietary right with
respect to the Products.
B. Any warranty or product liability claim with respect to the Products
or any breach by Vendor of this Agreement.
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C. Vendor represents and warrants that it has and will maintain during
the term of this Agreement sufficient insurance coverage, to enable it
to meet its obligations under this section.
10. ADVERTISING
10.1 Navarre shall have the right to utilize Vendor's trade name and any
trademarks and service marks associated with the Products to identify the
origin of the Products in advertising and promotional materials. With
respect to Products made by a third party, Vendor shall ensure that Navarre
has the right to use the third party's trademarks and service marks
associated with the Products in Navarre's advertising and promotional
materials.
10.2 Vendor shall support Navarre and Navarre's Customers with advertising,
marketing and promotional activities. As a part of these activities, Vendor
shall implement cooperative advertising and market development programs
that Navarre and its Customers can participate in.
10.3 Vendor agrees that it will provide support to Navarre for its advertising,
marketing and promotional activities. This support can be in the form of ad
production assistance, catalog direct mail programs, shows, advertising in
regional or national trade and/or consumer publications, and sales training
days. Funds will only be applied upon Vendor's prior approval on a case-by-
case basis. Navarre requires a minimum investment of two (2) percent of
total dollar amount, to be applied toward Navarre's marketing (detailed in
Exhibit "B") on an annual basis. Vendor shall issue a credit memo for these
costs.
10.4 Navarre requires payment by Vendor of an initial title set up fee of $200
per SKU. This fee includes positioning of the Product in both Navarre
catalog and business-to-business website. This is a non-occurrence set up
fee, applying to the initial set up of the Product line, and future Product
as there are released. Navarre will charge back the Vendor for such fees in
the month following the set up activity, and the Vendor will issue a credit
memo for such fees.
10.4 All cooperative advertising and market development funds (MDF) charges for
product ordered through Navarre must be authorized in writing prior to
placement. No verbal commitments will be accepted. In the event that such
Cooperative Advertising and/or Market Development Fund expenditure would
cause Navarre's account to move to a debit balance, Navarre reserves
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the right to require Vendor to pay for these expenditures in advance.
Charge backs will make claims for advertising and market development
expenditure to the Vendor, and Vendor will issue a credit memo for these
costs.
11. TERMINATION
11.1 Either party may terminate this Agreement not less than sixty (60) days
after written notice in the event of a material breach by the other party,
and the failure of such other party to cure such breach within thirty (30)
days of such notification.
11.2 Upon expiration or termination of this Agreement, Navarre shall have the
right, for two-hundred seventy (270) days after the termination, to return
to Vendor all or a portion of the Products in Navarre's inventory. Vendor
agrees to repurchase any such returned Products at the prices paid for them
by Navarre less price protections.
11.3 Navarre shall have the option to withhold a portion payment of any invoice
as a reserve against future returns, debit balances or chargebacks, based
upon rate of sale and unsold inventory exposure. Navarre shall have the
option to deduct from invoices due Vendor any credits or money due Navarre
from Vendor. In case there is a balance due Navarre, Vendor shall issue a
check to Navarre within thirty (30) days for the balance. In case of a
disputed account balance, both parties will make good faith effort to
reconcile account within twenty-one (21) days.
11.4 Sections 8, 9 and 10.1 shall survive the expiration or termination of this
Agreement.
12. MISCELLANEOUS
12.1 The laws of the state of Minnesota shall govern this Agreement. Any dispute
arising out of this Agreement shall be brought and prosecuted in a court
within Hennepin County Minnesota. For this purpose, Vendor appoints the
Secretary of State of Minnesota as its agent for service of process.
12.2 This Agreement shall not be assignable by either party, without prior
mutual agreement.
12.3 This Agreement supersedes all prior oral or written proposals and
communications between the parties related to this Agreement, and shall not
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be modified, rescinded, waived or otherwise changed except with the written
consent of the parties.
12.4 Each party confirms that no inducements, promises or representations, not
written herein, caused it to enter into this Agreement.
12.5 Neither party to this Agreement is the employee, agent or legal
representative of the other for any purpose whatsoever.
The parties, by the actions of their authorized representatives, have executed
this Agreement, including the attached Exhibit A, as of the date first mentioned
above.
SOFTLINK NAVARRE CORPORATION
/s/ Xxxxx X. Prior /s/ Ian Wavfield
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By: Xxxxx X. Prior Ian Wavfield
Vice President of Sales Vice President & General Manager
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Title Title
4/30/99 4/30/99
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Date Date
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