* Confidential Treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as *. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.
PRODUCTS AND SERVICES AGREEMENT
This Products and Services Agreement (this "Agreement") is entered into to
be effective as of the 28th day of August, 1999 (the "Effective Date"), by and
between CompUSA Inc., a Delaware corporation and Xxxxxx Micro Inc., a Delaware
corporation ("Ingram").
Background:
X. Xxxxxx is a provider of technology services and products.
B. CompUSA desires to purchase certain products for resale to its customers
and acquire certain services from Ingram on the terms set forth in this
Agreement.
C. CompUSA and Ingram desire to enter into a mutually beneficial arrangement
whereby Ingram shall provide products and services to CompUSA, all as set
forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
1.1 "BUSINESS DAY" shall mean, days other than Saturday, Sundays, and
holidays on which banks in Dallas, Texas are authorized to close. Whenever
this Agreement requires action to be taken on a day that is not a business
day, the applicable provision shall be construed to require such action to
be taken on the next business day following the day the action would
otherwise be required to be taken.
1.2 "CATALOG" is defined in Section 1.12 (definition of Xxxxxx
Products).
1.3 "COMPLEX BUILD" means a Configuration of a system that will be set
up for connectivity to a network which requires changes to the network
operating system (e.g., Novell, Windows NT, and UNIX).
1.4 "CONFIGURATION SERVICES" shall mean those Services to be provided by
Ingram as described on Schedule B.
1.5 "CONFIGURATIONS" shall mean Products or Goods which are to be
configured by Ingram prior to shipment to Customers.
1
1.6 "CONSTRAINED INVENTORY" shall mean Product which is available on a
limited basis from the Vendor because Product demand exceeds Product
availability from the Vendor.
1.7 "CUSTOMER" or "CUSTOMERS" shall mean purchasers of Goods and/or
Products which are direct shipped to the Customer by Ingram on behalf of
CompUSA.
1.8 "EFFECTIVE DATE" is defined in the first paragraph of this
Agreement.
1.9 "GOODS" shall mean, individually and/or collectively, any and all
products owned by Customers which CompUSA arranges to have Ingram store
and warehouse under the terms of this Agreement.
1.10 "GOODS WAREHOUSING SERVICES" shall mean those services to be
provided by Ingram as described in Schedule E.
1.11 "INGRAM COST" shall mean *.
1.12 "XXXXXX PRODUCTS" shall mean all hardware, software and other
products offered for sale from time to time as reflected in Xxxxxx'x
electronic product listing database that is provided to CompUSA
("Catalog").
1.13 "LIBOR" shall mean the British Bankers Association's London Inter
Bank Offered Rate fixed as of the last business day of each calendar
month, as published by Bloomberg, and effective as of the first day of the
following calendar month.
1.14 "MANAGEMENT FEE" shall mean the fee due Ingram as calculated in
Section 8.1 hereof.
1.15 "PROCUREMENT SERVICES" shall mean those services to be provided by
Ingram as described in Schedule D.
1.16 "PRODUCTS" shall mean "Xxxxxx Products" and "Third Party Products."
1.17 "RESERVE INVENTORY" shall mean Constrained Inventory, Large Account
Programs, or Available Inventory as defined in Schedule A.
1.18 "RMA" shall mean an Ingram Return Material Authorization as
described in Schedule F hereof.
1.19 "SERVICES" shall mean all of the services described in Section 5 and
detailed in the Schedules attached hereto and any other additional
services which CompUSA may request and Ingram may provide as permitted
under Section 5.2.
2
1.20 "SLA" shall mean one of the Service Level Agreements entered or to
be entered into by CompUSA and a Customer.
1.21 "TERM" shall mean the period of time beginning on the Effective Date
and ending on the earlier of (a) the fifth anniversary of the Effective
Date or (b) date on which a party terminates the Agreement as permitted
under the Agreement.
1.22 "THIRD PARTY PRODUCT" or "3P PRODUCT" shall mean hardware, software
or other products that Ingram does not offer in its Catalog, but which
Ingram shall procure on behalf of or from CompUSA under this Agreement.
1.23 "TOTAL PURCHASES" shall mean *.
1.24 "VENDOR" shall mean the manufacturer or publisher of a Product or
Goods.
2. SCOPE OF AGREEMENT.
2.1 This Agreement applies to purchases of Product by CompUSA for resale
to its Customers only.
3. COMPUSA COMMITMENTS.
3.1 SOLE SUPPLIER: Beginning on January 1, 2000 and continuing
throughout the Term, and except as provided under Sections 3.4.4, 7.1.5,
and 7.2, CompUSA shall purchase from Ingram not less than * (the "Purchase
Requirement") of all of the Product purchases for its Customers as
measured on a monthly aggregate basis.
3.2 THIRD PARTY PRODUCTS: CompUSA and Ingram shall work together to
transfer at no cost or expense to CompUSA and within ninety (90) days
after the Effective Date, any purchasing relationship which CompUSA has
with the 3P Product Vendors listed on Exhibit 3.2 attached hereto to a
direct purchasing relationship with Ingram. Promptly following the
Effective Date, CompUSA shall provide Ingram with a version of Exhibit 3.2
that prioritizes the order in which all Vendors on Exhibit 3.2 shall be
transferred to a direct purchasing relationship with Ingram. Ingram shall
use commercially reasonable efforts to transfer all 3P Product Vendors
listed on Exhibit 3.2 to direct purchasing relationships, and to do so in
the order specified by CompUSA, during the ninety (90) day period referred
to above. Until such time as Ingram has established a purchasing
relationship with a Vendor listed on Exhibit 3.2, CompUSA shall purchase
its 3P Product requirements directly from that Vendor and sell or
otherwise transfer such 3P Product to Ingram at CompUSA's cost.
3.3 STANDARD PRODUCTS: CompUSA has provided Ingram a list of Products
which it considers to be the standard products offered to its Customer
base (the "Standard Products"). The Standard Product list is attached
hereto as Exhibit 3.3 and may be
3
updated from time to time by CompUSA with ten (10) business days' notice
with the addition of such Products as CompUSA may select from the
Catalog.
3.4 FORECASTS AND CAPACITY:
3.4.1 CompUSA and Ingram agree to work together in good faith to
develop, by the 15th of each calendar month, forecasts for the
following calendar month for such items as the parties deem
appropriate. At a minimum, the forecasts will include estimates of
the number of configurations to be performed during the following
month on a weekly (or daily) basis and an estimate of the Standard
Products. For purposes of the forecasting provisions of this
Agreement, the following general procedures shall be applicable:
(a) On or before the first business day of each month,
Ingram shall provide CompUSA with historical run
rate data.
(b) Within seven (7) days following receipt of such
historical run rate data, CompUSA shall submit to
Ingram CompUSA's good faith forecast based on such
data.
(c) Within four (4) days after Xxxxxx'x receipt of
CompUSA's forecast, Ingram shall provide CompUSA
with any reasonable objections Ingram may have
regarding any item contained in such forecast.
(d) No later than the 15th day of each month, CompUSA
shall provide Ingram with CompUSA's analysis and/or
rationale substantiating its forecast. All
forecasted items that are not objected to, or for
which CompUSA provides substantiation, shall be
deemed final.
(e) In the event Ingram fails to provide the data
required by (a) above, any forecast submitted by
CompUSA on or before the 15th of any month shall be
deemed to be the governing forecast for the next
calendar month.
CompUSA will update its forecasts to reflect new orders, new
customers, or other significant developments as mutually agreed by
the parties. Ingram shall advise CompUSA of its concurrence or
disagreement with any forecast modifications proposed by CompUSA
within forty-eight (48) hours. In the event Ingram disagrees with
any forecast modification, CompUSA shall have the right to service
the business relating to such forecast modification from sources
other than Ingram, and such purchases shall not be included in the
calculation of the Purchase Requirement.
4
3.4.2 For those Customers for which Ingram has agreed to specific
SLA's under Section 7.2, the parties agree to work together in
good faith to develop forecasts of such items as the parties deem
appropriate by the 15th day of each month for a rolling 90-day
period beginning on the first day of the following month. If
necessary, the parties will update their forecasts to reflect new
orders, new customers, or other significant developments. The
first thirty (30) days of each forecast agreed to during under
this Section 3.4.2 shall be binding and may be modified only with
Xxxxxx'x consent.
3.4.3 Ingram will staff at 100% of the forecasting requirements
on a daily basis. Ingram will use its best efforts to support up
to 120% of the forecasted requirements. Ingram will provide
adequate warehouse space for Product inventory to support the
Configuration and assembly volumes as provided from the monthly
forecast. For purposes of sections 3.4.3 through 3.4.5 and 7.l.1,
the relevant forecasts will be the forecasts prepared by the 15th
for the following month and any updated forecasts agreed to at
least 5 business days prior to the date(s) forecasted.
3.4.4 In the event that CompUSA's Configuration requirements are
more than 120% of the forecasted requirements, Ingram will use its
best efforts to meet the requirements in excess of forecast. The
forecast for September 1999 will not exceed 375 Configurations per
day. Beginning, January 1, 2000, CompUSA shall reimburse Ingram
for direct payroll and other direct variable costs incurred by
Ingram for staffing in excess of the levels required to meet 120%
of the forecasted requirements; provided however, that no
reimbursement shall be made for any costs that were not approved
in writing by CompUSA before being incurred by Ingram. If CompUSA
does not agree to pay the costs requested by Ingram, CompUSA may
either (i) modify its work requirements to fall within the 120%
limit or (ii) meet the excess requirements from sources other than
Ingram, in which case such purchases will not be included in the
calculation of the Purchase Requirement.
3.4.5 Beginning January 1, 2000, if CompUSA Configuration
requirements are less than 80% of the forecasted requirements,
CompUSA shall reimburse Ingram for the direct payroll and other
direct variable costs incurred by Ingram for the difference
between the cost of staffing for the actual requirements and the
cost of staffing for 80% of the forecasted requirements.
4. PRODUCT SALES AND PRICING.
4.1 PRICE: Ingram will invoice CompUSA for *. Products will be priced
and invoiced at the time of shipment to Customers.
4.2 SHIPPING AND FREIGHT: Ingram will ship all Products and Goods
F.O.B. origin except (i) Ingram shall bear all standard ground freight
costs related to such shipments
5
and (ii) risk of loss will not transfer until delivery to the Customer.
In the event CompUSA directs Ingram to ship the Product in any manner
other than standard ground, for any reason other than an Ingram error,
all freight and special handling costs shall be charged to a third party
freight account provided by CompUSA at the time of shipment. Consistent
with the practices used by Ingram and CompUSA as of the Effective Date,
following the close of each month, Ingram shall issue a credit to CompUSA
in an amount equal to the ground freight costs which Ingram would have
incurred on any shipments where the freight costs were charged to
CompUSA's freight carrier account. CompUSA shall bear all freight and
handling costs for shipments of Goods and Products to destinations
outside of the United States.
4.3 SHIPPING DISCREPANCIES: No later than 30 days after delivery of
the Product or Goods to CompUSA or its Customer, CompUSA shall notify
Ingram of all claimed shortages or damaged Products or Goods. Ingram
shall bear all costs arising due to shipping errors made by Ingram.
4.4 REFUSALS: Ingram shall credit CompUSA the invoice amount and, by
separate invoice, charge CompUSA for any return freight costs incurred by
Ingram relating to any Product orders which are refused at time of
delivery to the Customer. However, Ingram shall bear all costs arising
due to shipping errors made by Ingram.
4.5 VENDOR RESTRICTIONS: Ingram shall not be required to sell to
CompUSA Products which may only be sold to resellers, unless CompUSA is
an authorized reseller of the Product. All Products delivered to CompUSA
or its Customers hereunder are subject to any restrictions or limitations
placed on them by the original seller (other than Ingram) or Vendor of
the Products. CompUSA is solely responsible for ensuring its adherence to
any and all such restrictions or requirements.
5. INGRAM SERVICES.
5.1 Ingram shall provide the following services to CompUSA as more
fully described in the designated Schedules attached to this Agreement:
SERVICES SCHEDULE
Order Fulfillment A
Configuration B
Ship Consolidation C
Goods Warehousing E
Product Returns F
Export Services G
5.2 After the Effective Date, CompUSA may request and Ingram may agree
to perform additional services not provided for under this Agreement. A
description of those additional services and the service fees relating
thereto shall be set forth in
6
additional Schedules to be mutually agreed upon by the parties and
attached to this Agreement.
5.3 During the initial year of the Term of the Agreement, Ingram will
evaluate and implement ways and means of adding efficiencies to
operations-related processes and the parties shall split equally all
mutually agreed to and identified cost savings.
6. TRANSITION SERVICES.
6.1 INVENTORY/RETURN AUTHORIZATIONS (RTV'S): Ingram shall issue to
CompUSA return authorizations for all CompUSA's product inventory as set
forth on the list dated August 26, 1999 (the "Inventory Product") which
is in resalable condition and currently offered by Ingram in its Catalog
at the time it is physically inspected by Ingram. Such inventory returns
will be transferred at Ingram Cost as of the date of inspection of such
Inventory Product.
6.2 INSPECTION OF THE INVENTORY PRODUCT:
6.2.1 Ingram shall be permitted to inspect the Inventory Product
located at CompUSA's Grapevine, Texas distribution center (the
"Grapevine Facility") within 30 days following the Effective Date.
At time of inspection of any Inventory Products, Ingram shall
advise CompUSA whether it will issue a return authorization for
such Inventory Products. Ingram shall remove all Inventory
Products which it intends to issue a return authorization from the
Grapevine Facility no later than 30 days following completion of
the physical inspection.
6.2.2 CompUSA shall ship at its cost all Inventory Product not
located at the Grapevine Facility to Xxxxxx'x facility located in
Rancho Cucamonga, California, prior to October 15, 1999. As soon
as practical, but not later than October 31, 1999, Ingram shall
inspect the Inventory Products and advise CompUSA for which of the
Inventory Products it will issue return authorizations.
6.3 REMAINDER INVENTORY: All Inventory Product for which Ingram
chooses not to issue return authorizations because it was either not in
resalable condition or in Xxxxxx'x Catalog at the time of inspection or
was not made available for inspection as required under Section 6.2 shall
be deemed to be "Remainder Inventory." At CompUSA's direction, Ingram
shall dispose of all Remainder Inventory through liquidation or
destruction or at CompUSA's direction return such Remainder Inventory to
CompUSA at CompUSA's expense on or before December 31, 1999. Ingram will
promptly remit to CompUSA all proceeds from the sale or other disposition
of the Remainder Inventory. Upon completion of the disposition of the
Remainder Inventory, Ingram shall issue an invoice to CompUSA for $3.25
per unit of Remainder
7
Inventory, and CompUSA shall pay such invoice within thirty days
following the date of receipt of the invoice.
6.4 FACILITIES SUBSIDY: On the next business day following execution
of this Agreement, Ingram shall pay CompUSA by wire transfer of
immediately available funds the sum of $ * to subsidize CompUSA's
operating costs related to its Grapevine Facility.
7. PERFORMANCE STANDARDS.
7.1 GENERAL PERFORMANCE STANDARDS: During the Term, Ingram shall
perform the Services in accordance with the following standards. All
standards will be based on the most recent forecasts submitted by CompUSA
in accordance with Section 3.4.
7.1.1 CONFIGURATIONS: On a daily basis, Ingram shall have (i) *
(the "Configuration Standard") of all Configurations (other than
Complex Builds), up to 120% of the forecasted amount, completed
and available for shipment on the next business day following
receipt of a Configuration order, and (ii) all remaining
Configurations (including all Complex Builds) completed and
available for shipment within three business days following
receipt of a Configuration order. During September, October,
November and December 1999, the Configuration Standard will be *
and *, respectively. The standards set forth in the preceding two
sentences shall only apply to "conforming" Configurations using
Standard Product and other Product in stock which are received
prior to noon local time at the configuration center. A
Configuration shall be deemed to be "conforming" if (i) it passes
technical review, which includes review of inventory issues,
technical issues, compatibility issues and pricing issues, or (ii)
Ingram does not notify CompUSA that the Configuration is
non-conforming, which notice shall describe why the order is
non-conforming, within two hours of Xxxxxx'x receipt of the
Configuration order (or, in the case of Complex Builds, within
four hours of Xxxxxx'x receipt of the Configuration order).
7.1.2 STANDARD PRODUCTS: On a daily basis, Ingram shall have * of
all orders for Standard Product (up to the forecasted amount and
not including Constrained Inventory) available for shipment on the
same day that the order is received if the order is received prior
to 5 p.m. local time at the shipping warehouse.
7.1.3 SHIPPING ACCURACY: On a daily basis, Ingram shall ship at
least * of all Product orders without shipping errors made by
Ingram. Shipping errors include but are not limited to shipments
incorrectly addressed or shipped to the wrong location, shipments
of the wrong quantity or type of Products, or other errors made by
Ingram relating to shipment.
8
7.1.4 PERFORMANCE REPORT: By the 5th day of each Ingram fiscal
month, Ingram shall provide a written report to CompUSA of its
Configuration and Standard Product shipment activity during the
prior month in sufficient detail and with such information as may
be necessary for CompUSA to quantify Xxxxxx'x level of compliance
with its obligations under Sections 7.1.1 and 7.1.2. In the
report, Ingram shall provide separate statistics for Configuration
and Standard Product shipment activities for Customers with SLA's
containing financial penalties by which Ingram has agreed to be
bound pursuant to Section 7.2.2 ("SLA Penalty Customers"). The
report shall also show the calculation of a "Performance Rate",
which shall be the monthly aggregate percentage of performance by
Ingram of the standards contained in Sections 7.1.1 and 7.1.2 for
all Customers other than SLA Penalty Customers.
7.1.5 PERFORMANCE REQUIREMENT: If the Performance Rate for any
month is at least * but less than *, the Purchase Requirement (as
defined in Section 3.1) will be reduced by five (5) percentage
points for the following month (e.g., from * to *). If the
Performance Rate for any month is at below *, the Purchase
Requirement will be reduced by ten (10) percentage points for the
following month. If the Performance Rate for any month is * or
above for any month when the Purchase Requirement is less than *,
the Purchase Requirement will be increased by ten (10) percentage
points for the following month, up to a maximum Purchase
Requirement of *.
7.2 SERVICE LEVEL AGREEMENTS:
7.2.1 CompUSA has provided Ingram copies of existing SLA's with
certain Customers as summarized on Exhibit 7.2.1. Ingram has
reviewed the performance obligations and warranties set forth in
Exhibit 7.2.1 and agrees to perform in accordance with those
requirements, even if such requirements are more restrictive than
the general standards set forth in Section 7.1. Ingram shall not
be bound by the financial penalties in the SLA agreements listed
on Exhibit 7.2.1; however, where Ingram has not agreed to be bound
by a financial penalty included in a customer agreement, and
Ingram fails to meet the SLA contained in such customer's
agreement, then CompUSA will be permitted to fulfill that contract
from sources other than Ingram and such purchases will not be
included in the calculation of the Purchase Requirement.
7.2.2 From time to time, CompUSA may without the prior approval
of Ingram, agree to additional SLA's so long as those SLA's are
equally or less restrictive than the General Performance Standards
set forth in Section 7.1 above. However, if a Customer requests
SLA's with performance standards more restrictive than those
stated in 7.1 above, CompUSA must present that request to Ingram
in writing. Ingram will have one business day to evaluate and
either accept or reject the SLA in writing, which rejection may be
accompanied by a description of the basis (including costs) on
which Ingram
9
will agree to such SLA. If Ingram accepts the SLA, Ingram will at
the same time either accept or reject the financial penalties, if
any, included in the agreement; and if Ingram rejects the
financial penalties, the arrangement will be governed by the final
sentence of Section 7.2.1. If Ingram rejects the SLA, CompUSA may
service the Customer requesting the SLA from other sources, and
Products for such Customer not purchased from Ingram shall not be
included in the calculation of the Purchase Requirement.
7.3 CONSTRAINED INVENTORY: Ingram shall ensure that CompUSA
receives all items of Constrained Inventory which CompUSA is
entitled to receive by virtue of any manufacturer's allocation of
Constrained Inventory for or on behalf of CompUSA or any CompUSA
Customer. Xxxxxx'x inability to obtain Constrained Product shall
not be considered when determining Xxxxxx'x performance against
the performance standards stated in this Section 7, provided that
(i) Ingram shall use commercially reasonable efforts to locate and
procure such Constrained Product, and (ii) Ingram notifies CompUSA
of its inability to obtain such Constrained Product within 24
hours. CompUSA shall then have the right to procure such
Constrained Product from other sources and such purchases shall be
treated as purchases of Third Party Products hereunder.
7.4 AUTHORIZED REPRESENTATIVE: Each party shall designate an
individual within its organization to monitor and manage SLA
compliance. Either party may change the individual designated by
providing notice in accordance with Section 16.1.
8. MANAGEMENT AND SERVICE FEES.
8.1 MANAGEMENT FEE: In consideration for the Order Fulfillment,
Configuration, Goods Warehousing and Product Return Services, Ingram will
be paid a Management Fee calculated by multiplying the Total Purchases
during each of Xxxxxx'x fiscal months by * .
8.2 SERVICE FEES: In addition to the Management Fee, Ingram shall
invoice and CompUSA shall pay the following additional service fees and
the fees set forth on Schedules A and E (the "Service Fees"):
8.2.1 CONFIGURATIONS/ASSET TAGS: In the event the total number of
Configurations and Asset Tags exceeds * in an Ingram fiscal
month, CompUSA shall pay Ingram $ * for each additional
Configuration and $ * for each additional Asset Tag completed by
Ingram during that month after the total reaches *.
Configurations that have Asset Tags will be counted and charged as
Configurations only. Ingram will provide CompUSA with a monthly
report showing all Configurations and Asset Tags for the prior
month on a daily basis together with all associated Configuration
and Asset Tag fees.
10
8.2.2 PRODUCT RETURNS: For each Product return in excess of the
limits set forth in Schedule F, CompUSA shall pay a fee of $ * per
unit.
8.2.3 THIRD PARTY PRODUCT PROCUREMENT FEE: For all 3P Product
Procurement Vendors other than those set forth on Exhibit 3.2,
CompUSA may request Ingram to establish a direct purchasing
relationship by Ingram with such 3P Product Procurement Vendor.
Ingram shall provide CompUSA with Xxxxxx'x response to any such
request within five (5) business days. If Ingram agrees to
establish a direct purchasing relationship with such 3P Product
Vendor, Xxxxxx'x response to CompUSA shall specify such agreement
and set forth the time within which such direct purchasing
relationship with Ingram will be established. If (i) Ingram fails
to provide a response within five (5) business days, (ii) declines
to establish a direct purchasing relationship with any 3P Product
Vendor or (iii) proposes a time frame for establishing such direct
purchasing relationship that is reasonably unacceptable to
CompUSA, CompUSA may continue to procure Product directly from
such 3P Product Procurement Vendor.
CompUSA shall pay Ingram a 3P Product Procurement Fee whenever
Ingram establishes a new purchasing relationship with a vendor of
3P Products. The fee for each new relationship will be $ * plus $
* per Product sku.
8.2.4 SHIP CONSOLIDATED FEES: CompUSA shall pay Ingram a Ship
Consolidated fee equal to $ * per Product unit which is processed
Ship Consolidated.
8.2.5 EXPORT SERVICE FEES: CompUSA shall pay Ingram and Export
Service fee equal to $ * per Product order.
8.3 MANAGEMENT FEE ADJUSTMENTS: The Management Fee has been determined
by Ingram based on the assumptions set forth in Exhibit 8.3 (the
"Assumptions"). The parties agree that in the event one or more of the
Assumptions above change materially, Ingram may propose prospective
revisions to the Management Fee to CompUSA. Such revisions may only be
proposed on each six-month anniversary of the Agreement and CompUSA shall
have a period of 30 days to review such proposed Management Fee
adjustment and to accept or reject such adjustment. In the event CompUSA
elects to reject any proposed Management Fee adjustment, and the parties
cannot agree on a mutually agreeable Management Fee within 30 days,
either party shall have the right to terminate the Agreement upon giving
the other party 180 days' prior written notice of its election to
terminate the Agreement.
9. PAYMENT AND CREDIT TERMS.
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9.1 GENERAL TERMS: All Product Purchases which are not subject to
flooring will be paid under net 30-day terms. The Management Fee will be
invoiced monthly and paid within fifteen (15) days from the date of
receipt of the invoice. All past due amounts shall accrue interest at an
annual interest rate equal to LIBOR plus six (6) additional percentage
points from the tenth day following the due date until paid. The Service
Fees will be invoiced monthly and paid within thirty (30) days from the
date of receipt of the invoice.
9.2 TIMELY PAYMENT:
9.2.1 In the event CompUSA fails to make timely payment of any
undisputed amount invoiced hereunder, and fails to cure same
within ten (10) business days after written notice of same, Ingram
shall have the right, in addition to any and all other rights and
remedies available to Ingram, at law or in equity, to revoke any
or all credit extended or to delay or cancel future deliveries of
Products or Services. Ingram shall not be required to reinstate
credit or deliveries regardless of future payment by CompUSA.
Ingram shall not exercise any remedy until the expiration of such
10-day cure period.
9.2.2 In the event Ingram fails to make timely payment of any
amount invoiced hereunder, and fails to cure same within ten (10)
business days after written notice of same, CompUSA shall have the
right, in addition to any and all other rights and remedies
available to the CompUSA, at law or in equity, to revoke any or
all credit extended. CompUSA shall not be required to reinstate
credit regardless of future payment by Ingram. CompUSA shall not
exercise any remedy until the expiration of such 10-day cure
period.
9.2.3 Disputed Items: If either party has a good faith dispute
with respect to an invoiced amount, such party will pay the
undisputed portion of the invoice and notify the other party of
the disputed amount no later than the date on which the invoiced
amount was due. For purposes of this Section, the deduction of any
amount from payment of any invoice shall be deemed notice of a
potential dispute provided the debit memo sets forth the reason
for the deduction. The parties will use their best efforts to
attempt to resolve any such disputes within 30 days thereafter.
The nonpayment of any such item which is in dispute shall not be
treated as a failure to pay for the purposes of Sections 9.2.1 and
9.2.2; provided that, in the event that it is determined that a
disputed amount is legitimate, such amount shall be paid within
five days of the date such dispute is resolved.
9.3 INSOLVENCY: Any obligation of Ingram or CompUSA under this
Agreement to deliver Products or Services on credit terms to the other
party shall terminate without notice if the other party files a voluntary
petition under a bankruptcy statute, or makes an assignment for the
benefit of creditors, or if an involuntary petition under a
12
bankruptcy statute is filed against such other party and not dismissed
within 90 days, or if a receiver or trustee is appointed to take
possession of the assets of the other party.
9.4 FAIR PRICING: Ingram represents to CompUSA that it believes that
the combination of the prices and terms for the Products and Services
being offered to CompUSA pursuant to this Agreement, when considered in
the aggregate, are at least as favorable as those offered by Ingram to
any other customer of Ingram with a business model similar to CompUSA and
which purchases products and services from Ingram in volumes similar to
CompUSA (hereafter, a "similar customer"). On a quarterly basis during
the term of this Agreement, Ingram and CompUSA will meet to review
current market prices and terms for the Products and Services being
offered by Ingram to CompUSA pursuant to this Agreement. At such
meetings, the parties will discuss in good faith amendments to such
prices and terms, if necessary, in order to render the prices and terms
for the Products and Services provided by Ingram to CompUSA, when
considered in the aggregate, to be at least as favorable as those then
being received by other similar customers of Ingram. Nothing herein shall
require Ingram to disclose the prices, terms or conditions on which it
sells products or provides services to specific customers.
9.5 WAIVER OF LIENS: Ingram hereby waives any warehouseman's,
inventory or other liens that it may have with respect to any
merchandise, equipment or other property belonging to CompUSA that is in
the possession of Xxxxxx.
10. TERM AND TERMINATION.
10.1 TERM: This Agreement will commence on the date set forth below and
will continue for a period of five years, unless earlier terminated
earlier in accordance with this Section 10.
10.2 TERMINATION FOR CAUSE: Either party may terminate this Agreement
upon the material breach by the other party if the breaching party fails
to cure such breach within sixty (60) days after receiving written notice
specifying the breach and indicating the notifying party's intent to
terminate if such breach is not cured, other than for breaches under
Section 9.2.1 or 9.2.2.
10.3 TERMINATION WITHOUT CAUSE: CompUSA may terminate this Agreement
without cause 90 days after notifying Ingram that it is terminating the
Agreement, and Ingram may terminate this Agreement without cause 180 days
after notifying CompUSA that it is terminating the Agreement, provided
that neither party shall have the right to issue a notice of termination
under this section during the first nine (9) months of the Term of this
Agreement.
10.4 EFFECT OF TERMINATION:
13
10.4.1 Upon termination, CompUSA will take all necessary steps to
have the Goods removed from Xxxxxx'x facility within 30 days after
the date of termination. Ingram will continue to safeguard all
Goods during the 30 day period and applicable fees will continue
to accrue. In the event CompUSA fails to have Goods removed,
Ingram may take steps to remove the Goods and recover all
associated costs as provided by law.
10.4.2 Termination of this Agreement will not affect the rights or
obligations of either party which accrued prior to the effective
time of termination. Except as otherwise stated in this Agreement,
no termination shall affect any of the nonbreaching party's other
rights and remedies available under this Agreement, at law or in
equity, nor be treated as an election of remedies by the
nonbreaching party.
10.4.3 The following sections shall survive any termination of
this Agreement: Section 10.4 and all of Sections 11 through 16.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
11.1 Both parties agree that neither party nor its designated personnel
shall disclose to third parties, or use for any purpose other than to
facilitate performance of this Agreement (including without limitation
soliciting or making sales to the customers of the other), any
confidential information, proprietary information and/or trade secrets of
the other, or any of its vendors, customers or agents ("Confidential
Information"), which has not been previously disclosed to the other by
outside third parties who were not bound to maintain its confidentiality,
or which is not in the public domain, without the other's prior written
permission. All Confidential Information will remain the property of the
respective owners. The parties grant to each other a nontransferable and
nonexclusive right to use Confidential Information, solely in the
performance of this Agreement. Confidential Information shall include, by
way of example and not of limitation, all things, ideas, models, devices,
plans, specifications, procedures, products, materials, processes,
computer firmware, computer programs, customer-specific images,
customer-specific loads, or customer-specific proprietary software,
business and marketing plans, price lists, customer lists, tooling and
equipment which are trade secrets or which include proprietary know-how
or information. Confidential Information shall include not only trade
secrets and proprietary know-how developed as a result of the performance
of the services by Ingram for CompUSA under this Agreement, but also
trade secrets, proprietary know-how and information obtained by Ingram
from third parties (including vendors and Customers) under a confidential
relationship and the identities of and related information pertaining to
CompUSA's Customers.
11.2 The foregoing obligation not to disclose Confidential Information
shall not apply with respect to a party's Confidential Information that
the other party (a) is advised by counsel is required to be disclosed by
any governmental agency or pursuant
14
to any law, code or regulation, provided the disclosing party notifies
the other party in writing as soon as it becomes aware of the disclosure
requirement so as to afford the other party every opportunity to take
whatever steps it deems necessary to protect the confidentiality of the
information or (b) must disclose in order to fulfill obligations to
financial partner.
11.3 As necessary to fulfill obligations to financial partners, CompUSA
may disclose the terms this Agreement.
11.4 In the event that either party determines that it must file this
Agreement as an exhibit to any registration statement or report it files
with the U.S. Securities and Exchange Commission (the "SEC"), that party
will: (i) request confidential treatment for the filing; (ii) permit the
other party to review and approve the portions of this Agreement for
which confidential treatment is requested at least 72 hours prior to the
filing; and (iii) permit the other party to participate in any
discussions with the SEC with respect to such request.
11.5 Each party will keep this Agreement and its terms confidential,
and will make no press release or public disclosure, either written or
oral, regarding the transactions contemplated by this Agreement without
the prior written consent of the other party hereto, which consent will
not be unreasonably withheld; provided that the foregoing will not
prohibit any disclosure that is required by law or the rules of any stock
exchange or other entity where a party's securities are traded.
12. RIGHT TO AUDIT.
12.1 Ingram will maintain written and/or electronic records
substantiating the basis for Ingram Cost, Fees and any other charges
billed or credited to CompUSA and any other transactions under this
Agreement. CompUSA shall have the right to have an independent audit firm
perform an audit of the records and related financial books and records,
as well as records of Ingram performance, during the term of this
Agreement and for a period of two years following the termination of this
Agreement.
12.2 CompUSA will maintain written and/or electronic records
substantiating the basis for any charges billed or credited to Ingram and
any other transactions under this Agreement. Ingram shall have the right
to have an independent audit firm perform an audit of the records and
related financial books and records, during the term of this Agreement
and for a period of two years following the termination of this
Agreement.
12.3 All audits permitted under Sections 12.1 and 12.2 shall be
conducted during normal business hours upon not less than five days'
notice to the party being audited. The party being audited shall have the
right to have its representative present during the audit process and
shall cooperate fully with the audit process. Such audits will be limited
to the party's records directly related to its performance under this
Agreement.
15
All audits will be conducted in a manner which does not unreasonably
disrupt the audited party's normal business operations.
12.4 If an audit discloses any overcharges or misstatement of costs or
sales, then payment will be adjusted to be in accordance with the terms
of this Agreement and the net amount determined to be overcharged or
undercharged will be promptly paid or credited. The cost (fees and
expenses) of the auditors will be borne by the party requesting the
audit, provided that if the audit results in a net adjustment in excess
of 3% of the amounts that were the subject of the audit, the party being
audited shall bear the costs of the auditors and all other costs of the
audit.
13. WARRANTIES.
13.1 SERVICE WARRANTY: All Services performed by Ingram will be done in
a professional, good and workmanlike manner and in accordance with
industry accepted practices.
13.2 PRODUCT WARRANTY: Product warranties, if any, are provided by the
vendor of the Products. Neither Ingram nor CompUSA makes any warranties
whatsoever regarding the Products or Goods. In the event that it is
determined that Ingram or CompUSA is responsible for a warranty relating
to Products or Goods, that party's sole obligation (and the other party's
sole remedy) in the event of breach of any warranty relating to Products
or Goods shall be the repair or replacement of defective Products or
Goods. UNLESS OTHERWISE STATED HEREIN, NEITHER INGRAM NOR COMPUSA MAKES
ANY OTHER WARRANTY REGARDING THE PRODUCTS OR GOODS, EITHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
13.3 Each party hereby warrants and represents that: (a) it has the
full and unrestricted right, power and authority to enter into this
Agreement and to perform its obligations in accordance with the terms of
this Agreement; and (b) its performance hereunder does not and will not
violate any (i) applicable law, rule or regulation or (ii) agreement,
obligation or understanding (whether oral or written) to which it is a
party.
13.4 SYSTEMS AVAILABILITY: Ingram hereby warrants and represents that
it shall take all reasonable steps required to maintain the availability
of its systems that are required to support this Agreement, including
without limitation EDI, Xxxxxx Xxxxx.xxx, IMPulse and Speedsource. Ingram
shall use its best efforts to remedy any system failure within eight
hours of any systems failure.
13.5 DISASTER RECOVERY: Ingram shall deliver a copy of its disaster
recovery policy to CompUSA within 10 days after execution of this
Agreement and warrants that it shall maintain a disaster recovery policy
in effect during the term of this Agreement.
16
13.6 SURREPTITIOUS CODES: Ingram warrants that its actions under this
Agreement will not introduce into the Products manufactured by others and
any medium manufactured by others by which they are delivered to Ingram,
any virus or any other contaminant, or disabling devices including, but
not limited to, codes, commands or instructions that may have the effect
or be used to access, alter, delete, damage or disable the Products.
13.7 Y2K: Each of CompUSA and Ingram hereby represent and warrant to
the other that its business operations and services provided under or
related to performance of this Agreement will not be interrupted by any
problems in its internal systems resulting from the Year 2000 date change
or any other date recognition issues during the year 2000.
13.8 INDEMNIFICATION: Each of CompUSA and Ingram shall indemnify,
defend and hold the other harmless from and against any losses, costs,
expenses, claims, judgments and other damages arising from or related to
a breach of a representation or warranty made in this Section 13.
14. INTELLECTUAL PROPERTY.
14.1 OWNERSHIP OF MARKS: Each party recognizes the other party's
ownership and title to certain trademarks, service marks and trade names,
whether or not registered federally or in any state(s), together with the
goodwill attached thereto, and agrees that any goodwill that accrues
because of the use of such marks and names will vest in and become the
property of the owner of each such xxxx(s) and name(s). Neither party
will, at any time during the term of this Agreement or at any time
thereafter, do or suffer to be done any act or thing that could in any
way impair the rights of the other party in and to such xxxx(s) and
name(s), and particularly will not represent that it has any title or
right of ownership in the other party's xxxx(s) and name(s).
14.2 PATENTS: No licenses, express or implied, under any patents are
granted by either party to the other party hereunder.
14.3 NOTIFICATION OF BREACH: Each party shall notify the other party
promptly of any known or suspected breach of the other party's
proprietary rights that comes to its attention.
14.4 LIABILITY DISCLAIMER: NEITHER INGRAM NOR COMPUSA SHALL BE LIABLE
FOR AND SHALL HAVE NO DUTY TO DEFEND, INDEMNIFY, OR HOLD HARMLESS THE
OTHER PARTY OR ITS CUSTOMERS FROM AND AGAINST ANY OR ALL CLAIMS MADE
AGAINST OR DAMAGES AND COSTS INCURRED BY THE OTHER PARTY AND ITS
CUSTOMERS ARISING FROM THE INFRINGEMENT OF ANY PATENTS OR TRADEMARKS OR
THE VIOLATION OF COPYRIGHTS BY PRODUCTS OR GOODS.
17
NOTWITHSTANDING ANY OTHER TERMS OR CONDITIONS TO THE CONTRARY, IN THE
EVENT THAT ITS DETERMINED THAT INGRAM OR COMPUSA IS LIABLE FOR ANY
INFRINGEMENT OR VIOLATION OF ANY PATENT, TRADEMARK OR COPYRIGHT BY
PRODUCTS OR GOODS, SUCH PARTY'S LIABILITY UNDER THIS SECTION SHALL NOT
EXCEED THE PURCHASE PRICES OF THE INFRINGING PRODUCT OR GOOD.
15. LIMIT OF LIABILITY.
15.1 NEITHER INGRAM NOR COMPUSA SHALL BE LIABLE TO THE OTHER, THE
OTHER'S CUSTOMERS, OR ANY OTHER PARTY FOR ANY LOSS, DAMAGE, OR INJURY
WHICH RESULTS FROM THE USE OR APPLICATION BY THE OTHER PARTY, A CUSTOMER,
OR ANY OTHER PARTY OF PRODUCTS DELIVERED TO THE OTHER PARTY OR A CUSTOMER
UNLESS THE LOSS OR DAMAGE RESULTS DIRECTLY FROM THE INTENTIONALLY
TORTIOUS OR FRADULENT ACTS OR OMISSIONS OF INGRAM OR COMPUSA, AS THE CASE
MAY BE. IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR DAMAGE,
DEATH OR INJURY FOR ANY PRODUCTS USED FOR AVIATION, MEDICAL, LIFESAVING,
LIFE SUSTAINING OR NUCLEAR APPLICATIONS.
15.2 IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY HERETO
FOR ANY INCIDENTAL, SPECIAL, INDIRECT, PUNITIVE AND/OR CONSEQUENTIAL
DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, ARISING FROM OR RELATED TO THE PERFORMANCE OF OR ANY FAILURE TO
PERFORM ANY OF SUCH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT. THE
FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO LIMIT DAMAGE
RECOVERY WHICH ARISES FROM OR IS RELATED TO A PARTY'S GROSS NEGLIGENCE IN
THE PERFORMANCE OF OR THE FAILURE TO PERFORM SUCH PARTY'S OBLIGATIONS
HEREUNDER. THE FOREGOING LIMITATION ON LIABILITY ALSO SHALL NOT SERVE TO
LIMIT ANY PARTY'S RECOVERY FOR DIRECT DAMAGES FOR BREACH OF THIS
AGREEMENT OR ANY REMEDY SPECIFICALLY SET FORTH HEREIN.
15.3 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL
DAMAGES OR DAMAGES OF ANY KIND OR NATURE ALLEGED TO HAVE RESULTED FROM
ANY BREACH OF A PRODUCT'S WARRANTY.
18
16. GENERAL.
16.1 NOTICES: Any notice or communication hereunder or in any agreement
entered into in connection with the transactions contemplated hereby must
be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in
person. Such notice will be deemed received on the date on which it is
hand-delivered or on the third business day following the date on which
it is so mailed. For purposes of notice, the addresses of the parties
will be:
IF TO COMPUSA:
CompUSA Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: President
WITH A COPY TO:
CompUSA Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Senior Vice President - General Counsel
IF TO INGRAM:
Xxxxxx Micro Inc.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
ATTN: President, North America
Facsimile Number: (000) 000-0000
WITH A COPY TO:
Xxxxxx Micro Inc.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
ATTN: General Counsel
Facsimile Number: (000) 000-0000
Any party may change its address for notice by written notice given to
the other parties in accordance with this Section.
16.2 GOVERNING LAW AND ACTIONS: This Agreement will be governed by and
construed in accordance with the substantive laws (but not the rules
governing conflicts of laws) of the State of Texas.
19
16.3 TAXES: CompUSA will bear all applicable federal, state, municipal,
and other government taxes on the Product and Services, excluding any
state or federal income tax liability of Ingram. Exemption or resale
certificates, valid in the place of delivery, must be presented to Ingram
prior to shipment if they are to be honored.
16.4 IMPROPER PAYMENTS: With respect to any transaction arising from
this Agreement, the parties agree not to make any illegal offer or make,
or commit to the making of, a transfer of anything of value (in the form
of compensation, gift, contribution or otherwise) to any employee,
representative, person or organization in any way connected with the
other party or any customer of the other party. Nothing in this Section
18.08 is intended to prevent ordinary and reasonable business
entertainment or gifts not of substantial value, customary in local
business relationships and not violative of law as applied in the
relevant jurisdiction.
16.5 COSTS, EXPENSES AND LEGAL FEES: In the event of any dispute or
litigation concerning any controversy or claim between the parties hereto
arising out of or relating to this Agreement or any other agreements
contemplated hereby, or the breach hereof or thereof, either party may
request that, in addition to determining the respective rights and
obligations of the parties, the finder of fact determine which party is
the "prevailing party" and the prevailing party will be entitled to
recover from the other party its reasonable expenses, attorneys' fees and
costs incurred in connection with the investigation, prosecution and
defense thereof or the enforcement or collection of any judgment or award
rendered therein.
16.6 COUNTERPARTS: This Agreement may be executed in any number of
original counterparts, each of which when executed and delivered will be
deemed to be an original and which when taken together will constitute
but one and the same instrument.
16.7 RELATIONSHIP OF THE PARTIES/INDEPENDENT CONTRACTOR: This Agreement
is not intended to create, and shall not be construed to create; a
relationship of principal and agent, master and servant, employer and
employee, joint venture, partnership, nor any other relationship other
than that of independent contracting parties.
16.8 INCORPORATION OF ALL SCHEDULES AND EXHIBITS: Each and every
Schedule and Exhibit referred to hereinabove initialed by the parties and
attached hereto is hereby incorporated by reference as if set forth
herein in full.
16.9 SERVICE OF PROCESS: Service of any and all process that may be
served on any party hereto in any suit, action or proceeding arising out
of this Agreement may be made in the manner and to the address set forth
in Section 16.1 and service thus made will be taken and held to be valid
personal service upon such party by any party hereto on whose behalf such
service is made.
20
16.10 ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties regarding the Products, Goods and Services, and, will
cancel, terminate, and supersede any and all previous agreements,
proposals, representations, or other statements, whether oral or written,
including without limitation the Letter of Intent entered into by Ingram
and CompUSA dated June 23, 1999. The terms of this Agreement will
supersede the terms of any invoice, purchase order, or other form issued
by either party. Any modifications of this Agreement must be in writing
and signed by an authorized representative of each party.
16.11 AMENDMENT; WAIVER: This Agreement may not be added to, modified,
superseded or otherwise altered except by a written instrument signed by
all the parties hereto. The waiver by a party hereto of any default
hereunder will not be deemed to be a waiver of subsequent defaults of the
same or different kind. The failure of any party to act will not in and
of itself be construed as a waiver.
16.12 FORCE MAJEURE: If any party fails to perform its obligations
because of strikes, lockouts, labor disputes, embargoes, acts of God,
inability to obtain labor or materials, governmental restrictions,
governmental regulations, governmental controls, judicial orders, enemy
or hostile governmental action, civil commotion, fire or other casualty,
or other causes beyond the reasonable control of the party obligated to
perform, then that party's performance shall be excused for a period
equal to the period of such cause for failure to perform as long as the
party who fails to perform gives the other party notice within ten (10)
days after the event causing the failure.
16.13 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 may be assigned by Ingram to its subsidiaries or to any
successor (by merger or otherwise) to all or substantially all of its
assets or to CompUSA; provided, however, that no such assignment shall
relieve Ingram of its obligations hereunder. This Agreement may be
assigned by CompUSA to any of its subsidiaries or to any successor (by
merger or otherwise) to all or substantially all of its assets; provided,
however, that no such assignment shall relieve CompUSA of its obligations
hereunder. This Agreement will not be deemed to confer any rights or
remedies upon any person not a party hereto.
16.14 SEVERABILITY: If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be fully severable
and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part hereof; and the
remaining provisions hereof will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as part of
this Agreement a provision as similar in its terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid
and enforceable.
21
16.15 CAPTIONS: The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
16.16 NUMBER: When the context requires, the number of all words
includes the singular and plural.
16.17 REFERENCE TO AGREEMENT: Use of the words "herein," "hereof,"
"hereto" and the like in this Agreement refer to this Agreement as a
whole and not to any particular Article, Section or provision of this
Agreement, unless otherwise noted.
16.18 CURRENCY: Unless otherwise stated herein, all prices and fees are
calculated in and must be paid in U.S. dollars.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to sign this Agreement to be effective as of the date first set forth
above.
CompUSA: CompUSA Inc. Ingram: Xxxxxx Micro Inc.
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXXX
--------------------- ----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxx
----------------- ---------------------------
(PRINT NAME) (PRINT NAME)
Title: Executive Vice President - Title: Executive Vice President
Business Solutions --------------------------
22
LIST OF SCHEDULES AND EXHIBIT
SCHEDULES
SCHEDULE A ORDER FULFILLMENT
SCHEDULE B CONFIGURATION SERVICES
SCHEDULE C SHIP CONSOLIDATED SERVICES
SCHEDULE D [RESERVED]
SCHEDULE E GOODS WAREHOUSING
SCHEDULE F PRODUCT RETURNS SERVICES
SCHECULE G EXPORT SERVICES
EXHIBITS
EXHIBIT 3.2 THIRD PARTY PRODUCT VENDOR
EXHIBIT 3.3 STANDARD PRODUCTS
EXHIBIT 7.2.1 SUMMARY OF CUSTOMER SLA'S
EXHIBIT 8.3 ASSUMPTIONS
23
SCHEDULE A
ORDER FULFILLMENT SERVICES
1. SCOPE: This Schedule describes the pick, pack and ship services (Order
Fulfillment) for Products and Goods that Ingram will provide to CompUSA.
2. RESERVE INVENTORY - Upon CompUSA's written request, Ingram will reserve
Product inventory for CompUSA's exclusive use. The reserve period shall
begin on the date of the notice on the date the inventory is received by
Ingram, whichever is later, and shall end on the date of shipment or the
date CompUSA provides written notice to Ingram to remove inventory from the
reserve, whichever is earlier.
Reserve Inventory Fees:
*
3. GENERAL DESCRIPTIONS OF ORDER FULFILLMENT SERVICES:
- Utilize Xxxxxx'x warehouse network
- Serial number capture
- Order ship complete - The process of shipping Products or 3P Product
from multiple warehouses on the same day to arrive within a small span
of time of each other.
- Personalized Delivery - The packing slip and shipping label for every
order has CompUSA's name, address and logo. CompUSA can elect to have
the packing slip address be the "xxxx to", "ship to" or a customized
address so that Ingram is not visible to the Customer. In addition
CompUSA may add a static or dynamic message and the CompUSA or
Customer P.O. number on the packing slip. The shipping label may also
be customized as indicated above except the shipping address must be
an Ingram warehouse so refused shipments can be properly returned.
Additional fields such as: xxxx for name, xxxx for phone numbers,
Delivery Order number and contract number may be added upon request.
- Branch transfers as required
4. FEES:
Included in Management Fee, except for Reserve Inventory Fees.
24
SCHEDULE B
CONFIGURATION SERVICES
1. SCOPE OF SERVICES: Ingram will provide technical review, integration, ISO
management, quality management, image management, customer infrastructure
management, data center management and test services ("Configuration services")
for Ingram Product, 3P Product and Goods upon receipt of a purchase order from
CompUSA.
2. CONFIGURATION SERVICES:
X. Xxxxxx will integrate the Products, 3P Products and Goods according to
CompUSA's written instructions. Ingram will functionally test Configurations to
ensure that the integration of components has been performed correctly and the
solution meets the functionality and compatibility specifications expected from
such integration.
X. Xxxxxx will use its best efforts to meet the SLAs for Configurations
in Schedule X. Xxxxxx will not be responsible for schedule slippage or related
expenses, including but not limited to, overtime labor and freight associated
with expediting the production or delivery of Configurations containing Goods
supplied by CompUSA or supplied by a third party arranged by CompUSA, if
scheduled delivery of Configurations are delayed due to unavailability, late
delivery or inoperative Goods provided by CompUSA or a third party arranged by
CompUSA. Ingram will provide CompUSA with as much advance notice as is
practicable of potential schedule slippage or additional expenses; provided
however, that no reimbursement shall be made for any expenses that were not
approved in writing by CompUSA before being incurred by Ingram.
C. Prior to returning defective Configurations to Ingram, CompUSA will
contact a designated Ingram Customer Service Representative who will provide the
CompUSA RMA number which must accompany all Goods/Product returned to Ingram.
RMA numbers will be included with the shipment documentation and all returns
should be shipped to (ADDRESS TO BE PROVIDED BY INGRAM ACCOUNT MANAGER). Ingram
reserves the right to refuse any shipment of Configurations if CompUSA has not
provided the designated RMA number with the shipment documentation.
All defective Configurations returned to Ingram by CompUSA will be reviewed by
Ingram prior to any credit for such returns being issued. Ingram will not issue
credit for Configurations that have been modified including, but not limited to,
the exchange of Goods/Product within the Configuration with other Goods/Product
not shipped in the original Configuration. Ingram will provide notification to
CompUSA of modification of Configurations within one (1) business day of receipt
of such Configurations.
Configurations returned to Ingram at the address indicated above for repair or
correction will be repaired, corrected and shipped at Xxxxxx'x expense within
two (2) business days of receipt of
25
such Configurations at Ingram. Ingram will only pay the freight for
Configurations returned if the defect was due to Ingram error.
Ingram will not accept Stock Balance returns for Configurations.
Ingram will notify CompUSA within two business days of the return to Ingram of
Configurations that have been refused in shipment or result from the
cancellation of an order. CompUSA will within one business day of such
notification attempt to restore the order and reship the Configuration.
Configurations that are not reshipped will be depopulated. Credit will be issued
to CompUSA for the amount of the original invoices less freight and a
depopulation fee and the value of any Goods/Product that cannot be used as new
for a future CompUSA purchase order.
X. Xxxxxx warrants that it will perform the requested Configuration
Services in a good, workmanlike manner in accordance with the Configuration
Instructions mutually agreed to between Ingram and CompUSA at the time the
services are performed. All copies of software reproduced by Ingram for
inclusion in any Configuration shall be true and complete copies of such
software and shall include all copyright and trademark notices. The warranty
period for Configuration Services shall be sixty (60) days from the date of
invoice of the Configurations ("Configuration Warranty Period"). If, within
fifteen (15) business days of receipt of a Configuration, CompUSA or its
Customers, in its sole discretion, determines that a Configuration does not
perform in accordance with the Configuration order, then Ingram, at its own
expense, shall make all adjustments, repairs and replacements necessary to cause
the Configuration to perform in accordance with the Configuration order. In the
event Ingram is unable to perform such adjustments, repairs and replacements
necessary to cause the Configuration to perform in accordance with the
Configuration order, CompUSA shall be entitled to perform such adjustments,
repairs and replacements necessary to cause the Configuration to perform in
accordance with the Configuration order, or to return the Configuration for a
full refund. In either case, CompUSA is to receive a full refund of any charges
paid by CompUSA to Ingram for the related Configuration Services.
E. COMPUSA IS RESPONSIBLE FOR ANY ADDITIONAL WARRANTIES OR DISCLAIMERS
WHICH IT MAY WISH TO MAKE TO ITS CUSTOMERS WITH RESPECT TO THE GOODS OR
CONFIGURATIONS DELIVERED HEREUNDER.
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SCHEDULE C
SHIP CONSOLIDATED SERVICES
1. In cases where all Products on a sales order are not located at one
distribution center, CompUSA may direct Ingram to consolidate all of the
Products into a single shipment. Ingram will branch transfer the Products
to the Ingram facility designated by the Ingram account manager and hold
them at that location until all the Products can be consolidated into a
single shipment.
2. If all Products on a sales order are available at one of Xxxxxx'x
distribution centers in the United States, Ingram will pick, pack and ship
the order for that distribution center without charging a Ship Consolidated
fee.
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SCHEDULE D
[RESERVED]
28
SCHEDULE E
GOODS WAREHOUSING
1. SCOPE. Ingram will warehouse Goods in its facilities. Upon receipt of a
purchase order, Ingram will pick, pack and ship the requested Goods as per
the instructions on the purchase order. Ownership of the Goods shall remain
at all times with CompUSA's Customer.
2. GOODS WAREHOUSING SERVICES
X. Xxxxxx requires written notice (e.g., a written purchase order) from
CompUSA advising Ingram as to the type, quantity, place of delivery, and
estimated time of arrival of Goods that are to be warehoused. In addition,
notification via electronic mail or electronic data interchange is
permissible.
X. Xxxxxx will provide the amount of warehouse space as the parties may
mutually agree for storage of Goods.
X. Xxxxxx will receive Goods and provide notification and SKU reporting
as mutually agreed upon by the parties.
D. CompUSA will have the right, upon 2 hours' notice, to audit Goods
inventory held by Ingram during normal business hours.
X. Xxxxxx will be responsible for all shrinkage to the Goods while in its
possession based on a physical inventory taken on a six-month basis. Ingram
will only be responsible to the extent of the value of the landed
replacement cost of the Goods. Xxxxxx'x inventory record as shown in
IMPulse will be the controlling inventory report. Should any Goods be found
in excess of the inventory on record, both parties agree to consult one
another to reconcile any discrepancies.
3. FEES: $5.00 per unit incurred at the time of shipment.
4. LIABILITY AND LIMITATION OF DAMAGES
A. In the event of loss, injury or damage to the Goods while in Xxxxxx'x
possession, CompUSA will determine which Goods require replacement, and
Ingram will replace the Goods lost or damaged. If such Goods cannot be
replaced, Ingram will pay the replacement cost for such Goods. CompUSA will
allow Ingram to examine invoices, during normal business hours, for such
Goods upon request by Ingram. Notwithstanding any other provision to the
contrary in this Agreement, Xxxxxx'x maximum liability for loss, injury or
damage to Goods will not exceed the actual replacement cost of the Goods
and will not exceed $1,000,000 during any 12-month period.
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SCHEDULE F
PRODUCT RETURN SERVICES
PRODUCT RETURNS:
1. GENERAL: All returns must be accompanied by a valid CompUSA Return Material
Authorization ("RMA") number. Each return must be packaged separately for
each RMA and contain only Product specified on that RMA, All RMA's are
valid for thirty (30) days from that date of issuance.
2. Subject to paragraphs 3 through 6 below, and Xxxxxx'x ability to return
Product to the manufacturer or publisher of the Products, Ingram shall
issue to CompUSA an RMA for Products purchased from Ingram for replacement
or credit against future purchases by CompUSA. Credit for returns is
calculated at the last purchase price or the current price, whichever is
lower.
3. In the event CompUSA requests an RMA for credit on Products, Ingram will
make commercially reasonable efforts to return the identified Products to
the Vendor for credit.
4. After the Effective Date, the parties will negotiate in good faith to
mutually further define disposition strategies and parameters associated
with liquidation, disposition and auction services with the goal of
completing definitive procedures within thirty (30) days of the Effective
Date. In any event, all liquidation, disposition and auction activities of
Ingram pursuant to this Agreement should be conducted in a commercially
reasonable manner and Ingram shall use commercially reasonable efforts to
maximize the price obtainable for CompUSA in connection with any such
liquidation, disposition or auction activities. CompUSA shall have the
right to audit Xxxxxx'x liquidation, disposition and/or auction procedures
and processes and any reasonable changes to such procedures and processes
requested by CompUSA shall be implemented by Ingram to the extent
commercially practicable.
5. PRODUCT RETURN LIMITATIONS: If the cumulative total of Product returns,
defective and otherwise, exceed 5% of the total Ingram Cost of all Product
purchases during the preceding ninety (90) day period, then Ingram shall
accept Product in excess of the foregoing 5% threshold, subject to the
following:
(a) CompUSA shall pay Ingram $ * for each Product unit returned, and
(b) CompUSA shall be entitled to receive only the actual amount
realized by Ingram (whether from the Vendor or otherwise) at the time
of disposition of the returned Product.
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6. RIGHT TO AUDIT/INSPECT: During normal business hours, CompUSA shall have
the right to inspect the RMA process at Ingram on two (2) hours' notice and
the right to audit the RMA process at Ingram on seventy-two (72) hours'
notice.
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SCHEDULE G
EXPORT SERVICES
Ingram agrees to provide CompUSA with the export handling services ("Export
Services") described in Section 1 of this Schedule for any shipment of Products
or Goods outside of the fifty United States and the District of Columbia. Ingram
and CompUSA agree that the Export Services shall be subject to the terms and
conditions stated in this Schedule.
1. XXXXXX'X RESPONSIBILITIES
Ingram shall provide the following services in accordance with Xxxxxx'x standard
export practice:
1.1 Prepare all required export and shipping documentation, including, but not
limited to, the Shippers' Export Declaration ("SED"), commercial invoices,
certificates of origin (excluding NAFTA), Destination Control Statements,
and packing lists.
1.2 Arrange for transportation of the Products or Goods to the destination
designated by CompUSA (or its customer), or deliver the Products or Goods
to the carrier designated by CompUSA (or its customer).
1.3 In conjunction with preparing the export documentation, including the SED,
Ingram shall use the Export Classification Control Number ("ECCN") and the
licensing authorization (E.G., License, License Exception, or NLR) for each
Product or Good as provided by CompUSA. As promptly as practicable after
the Effective Date, CompUSA shall provide to Ingram the ECCN and licensing
authorization currently used by CompUSA. In the event CompUSA does not
provide Ingram with the ECCN or licensing authority for a particular
Product or Good, Ingram shall consult with CompUSA to determine the
applicable ECCN and licensing authority prior to exporting the Product from
the United States.
1.4 Perform independent screening of each consignee against the Table of Denial
Orders, list of Specially Designated Nationals and Blocked Persons, EAR
Entities List, and any other applicable list of prohibited persons or
destinations.
1.5 Designate the same Harmonized Tariff Schedule ("HTS") number for each
Product or Good which Ingram assigns to the Product/Good when it exports
the Product/Good from the United States itself.
1.6 Maintain all export, shipping and related documents for a period of five
(5) years in accordance with U.S. law, and make such documents available to
CompUSA upon its request.
1.7 Forward the xxxx of lading and other shipping documents to CompUSA or such
persons or entities designated by CompUSA.
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1.8 Facilitate and cooperate with any inspections, including for insurance or
pre-shipment certification.
2. COMPUSA'S RESPONSIBILITIES
With respect to each Product or Goods order, CompUSA shall:
2.1 Enter orders with complete information and details of the shipment required
(including whether Ingram should arrange transportation to the overseas
customer or deliver the Products and Goods to a domestic carrier).
2.2 Provide Ingram with the correct ECCN classification and licensing authority
of each Product or Good to be exported by Ingram, or provide Ingram with
adequate information to consult with CompUSA in order to make this
determination.
2.3 Take appropriate steps to determine that the export of Products and Goods
are permissible under U.S. export laws and regulations (including the
Export Administration Regulations and the regulations of the Office of
Foreign Assets Control).
2.4 CompUSA shall be identified on all documents as the "Exporter of Record".
2.5 Establish CompUSA's Customer pricing and delivery terms and communicate
these to Ingram in a timely manner.
2.6 Bear all costs and risk of loss for Products or Goods sold by Ingram to
CompUSA, including, but not limited to, freight, freight forwarder fees,
in-transit insurance, and doc-ument preparation fees.
2.7 Review all Customer orders in accordance with Title 15 of the Code of
Federal Regulations for Table of Denials, Denied Parties Listings, and
Specially Blocked Nationals and deny acceptance of orders placed by parties
identified in those lists.
2.8 Confirm any required preshipment inspections required by the destination
country's government.
3. LIMITED POWER OF ATTORNEY
COMPUSA hereby appoints Ingram as its limited agent for the purpose of
arranging for the shipment and delivery of Products or Goods to CompUSA's
Customers. COMPUSA grants Ingram a Power of Attorney to create and execute
all the documentation needed to export the Products or Goods purchased by
COMPUSA for resale and export to its Customers, in the form shown in
Attachment A.
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4. SALE AND SHIPMENT
4.1 All Product orders shall be sold by Ingram to CompUSA ExWorks, Xxxxxx'x
dock, as defined by Incoterms 1990. At such time, CompUSA will take title
to the Products or Goods and bear all risk of loss.
4.2 At the request of CompUSA, Ingram shall arrange for inland and overseas
transportation and/or insurance pursuant to the delivery terms between
CompUSA and its customers. Ingram shall invoice CompUSA (or its customer)
for the actual cost of such transportation and insurance.
5. FEES & PAYMENT TERMS
5.1 Ingram will charge a handling fee of $ * for each order (E.G., each
customer transaction).
5.2 Any costs incurred for the cancellation of orders or delays in the shipment
of orders caused by or at the direction of CompUSA will be invoiced to
CompUSA at the actual cost. All payments will be due and payable net ten
(10) days from invoice date.
6. INDEMNIFICATION
6.1 INGRAM SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS COMPUSA FROM AND AGAINST
ANY CLAIMS, DEMANDS, LIABILITIES OR EXPENSES (INCLUDING ATTORNEY'S FEES AND
COSTS) RESULTING FROM THE NEGLIGENT ACT, ERROR OR OMISSION OF INGRAM IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
6.2 COMPUSA SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS INGRAM FROM AND AGAINST
ANY CLAIMS, DEMANDS, LIABILITIES OR EXPENSES (INCLUDING ATTORNEY'S FEES AND
COSTS) RESULTING FROM THE NEGLIGENT ACT, ERROR OR OMISSION OF COMPUSA IN
THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
7. DISCLAIMER OF WARRANTIES
INGRAM MAKES NO WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, THAT ITS
CLASSIFICATION OF ANY PRODUCT CONFORMS TO THE APPLICABLE LAWS AND
REGULATIONS. INGRAM MAKES NO WARRANTY OR REPRESENTATION THAT THE SCREENING
OF CONSIGNEES UNDER SECTION 1.4 WILL BE WITHOUT ERROR.
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INGRAM DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTY OF MERCHANTABILITY AND THE IMPLIED WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE.
8. AUDITS AND ACCOUNT RECONCILIATION.
For export compliance, Ingram and CompUSA each reserve the right to audit
the other company's business process as part of Xxxxxx'x and CompUSA's
Due Diligence effort as required by the EAR (Export Administration
Regulations). Ingram and CompUSA shall mutually resolve any and all
existing discrepancies between the respective books and records between
the two parties.
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SCHEDULE G
ATTACHMENT A
POWER OF ATTORNEY
EXPORT FORWARDING AGENT
Know all men by these presents, That _____________________________
(Name of Exporter), the Exporter organized and doing business under the laws of
the State or Country of ______________________________ and having an office and
place of business at _____________________________ (Address of Exporter) hereby
authorizes Xxxxxx Micro Inc., the Forwarding Agent, at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, to act for and on its behalf as a true and
lawful agent and attorney of the Exporter for and in the name, place, and stead
of the Exporter, from this date, in the United States either in writing,
electronically, or by other authorized means to:
Act as Forwarding Agent for Export Control, Census Reporting, and
Customs purposes. Make, endorse, or sign any Shipper's Export Declaration or
other documents or to perform any act which may be required by law or regulation
in connection with the exportation or transportation of any merchandise shipped
or consigned by or to the Exporter and to receive or ship any merchandise on
behalf of the Exporter.
The Exporter hereby certifies that all statements and information
contained in the documentation provided to the Forwarding Agent relating to
exportation are true and correct. Furthermore, the Exporter understands that
civil and criminal penalties may be imposed for making false or fraudulent
statements or for the violation of any United States laws or regulations on
exportation.
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This power of attorney is to remain in full force and effect until
revocation in writing is duly given by the Exporter and received by the
Forwarding Agent.
In witness whereof, _________________________ (Full Name of Exporter/Exporting
Company) caused these presents to be sealed and signed:
Witness:
---------------------------
Signature:
-------------------------
Capacity:
--------------------------
Date:
------------------------------
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EXHIBIT 3.2
THIRD PARTY PRODUCT VENDOR
Previously provided.
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EXHIBIT 3.3
STANDARD PRODUCTS
Previously provided.
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EXHIBIT 7.2.1
SUMMARY OF CUSTOMER SLA'S
CompUSA has existing SLA's with certain customers as set forth below:
*
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EXHIBIT 8.3
ASSUMPTIONS
(a) The three-month average LIBOR at the end of each of Xxxxxx'x fiscal
quarters shall not exceed the three-month average LIBOR on June 9, 1999.
(b) During the term of the Agreement, CompUSA shall be in compliance with
Section 3.1 of the Agreement.
(c) Beginning eight weeks after the Effective Date, at least * of the product
purchases will be capable of being subsidized through vendor-sponsored flooring
programs.
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