CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT 10.20
VENDOR AGREEMENT
Between:
Best Buy Co., Inc. NETGEAR, INC. "Vendor"
7075 Flying Cloud Drive and 0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
1. License to Sell Products. Subject to the terms of this
Agreement, Vendor grants Best Buy Co., Inc., and its affiliates and subsidiaries
("Best Buy"), a non-exclusive, non-transferable license to distribute the
products described in Exhibit A, as may be amended from time to time by mutual
agreement (the "Products"), to end users and commercial buyers/licensees in the
United States, Canada and other territories as agreed from time to time, solely
through its present and future retail stores, Internet Websites, distribution
centers and mail order distribution centers. Best Buy may obtain Products by
placing orders under this Agreement that are accepted by Vendor. Vendor shall be
deemed to have accepted a purchase order from Best Buy unless Vendor sends Best
Buy a written rejection within 2 business days of its receipt thereof. Vendor
will acknowledge its receipt of a purchase order by sending Best Buy an EDI997
(Functional Acknowledgement). Each order placed with Vendor for Products shall
be governed by this Agreement, regardless of any additional or conflicting term
in Best Buy's order. Orders must be for minimum lot sizes (case carton
quantities) and must conform to the ordering guidelines as described in Vendor's
Retailer Manual that is in effect on the Effective Date of this Agreement
(attached and incorporated into this Agreement as Exhibit D) and as amended from
time to time.[*].
2. Pricing and Taxes.
- Prices: Subject to the terms of this Agreement,
Vendor will sell the Products set forth on Exhibit A
to Best Buy at the prices set forth therein; as may
be changed from time to time. Vendor guarantees
competitive pricing with that offered by Vendor to
other like retailers for the same quantity purchased;
provided that prices must be compared taking into
account all of the terms and conditions of the
transaction at the time it was offered by Vendor.
- Taxes: Vendor's prices do not include sales, use,
excise, or other taxes, however designated (except
taxes based on Vendor's net income). The amount of
any valid present or future sales, use, excise, or
other tax which is attributable to Best Buy shall be
paid by Best Buy; or in lieu thereof. Best Buy shall
provide Vendor with a tax exemption certificate
acceptable to the taxing authorities.
3. Payment. Vendor shall electronically submit an invoice to Best
Buy within 2 business days of the day Product is shipped. Invoice credit terms
will be as set forth in the Vendor Program Agreement, as described herein, which
may be updated from time to time by the parties' mutual agreement. The
designated credit term shall commence on the date Best Buy receives Product at
the FOB point agreed upon by the parties in Section 4 hereof. No additional
charges of any type beyond the price of the Products shall be added to an
invoice without Best Buy's express written consent other than those taxes
described in Section 2 of this Agreement. Vendor may withhold shipment of
Products if Best Buy is delinquent in making undisputed payments under this
Agreement. All transactions must be valued and paid in U.S. currency. Best Buy
may offset from Vendor's invoice any indebtedness of Vendor, if: (a) the
indebtedness is related to the performance of this Agreement; and (b) Best Buy
submits either prior to or along with its payment from which the offset is made
- sufficient documentation justifying the offset under the terms of this
Agreement.
Vendor's Invoices should be via EDI, as set forth in Section 10. Best
Buy Purchasing LLC is a controlled subsidiary of Best Buy Co., Inc. Best Buy
Purchasing LLC will pay Vendor invoices in accordance with this Section 3 and
shall initially assume title to all Products (subject to Vendor's security
interest, described above). Best Buy Purchasing LLC will resell and transfer
title to such Products to Best Buy Co., Inc.'s other affiliates and subsidiaries
to
distribute the Products through the sales channels provided in Section 1. Best
Buy Co., Inc. guarantees the performance required of Best Buy Purchasing LLC
under this Agreement.
4. Shipping.
- Select Shipping Terms: One of the following ground
shipment terms shall be agreed upon at the time this
Agreement is executed by checking the applicable box.
No other ground shipment terms other than the two
options described below may be used.
[*] FOB Origin, Freight Collect and Allowed. Best Buy shall be
responsible for carrier selection, routing instructions and
pick-up appointments at Vendor's domestic origin facility. In
addition, Best Buy is responsible for carrier freight
payments, submitting freight claims for loss and damage,
scheduling appointments at destination, and tracking and
tracing freight in transit. Title and risk of loss passes to
Best Buy Purchasing LLC upon delivery to Best Buy at Vendor's
domestic origin shipping dock. Vendor agrees to have Products
in ship-ready condition on the ship date specified in the
applicable purchase order and provide forty-eight (48) hour
notice of pick-up request to Best Buy for truckload shipments
and twenty-four (24) hour notice of pick-up request to Best
Buy for less-than-truckload shipments. Vendor will pay a
freight allowance to Best Buy pursuant to the attached
Collaborative Transportation Agreement, as amended from time
to time by the parties.
[*] FOB Destination, Freight Prepaid by Vendor. Vendor shall be
responsible for carrier selection, routing instructions and
freight payment. Title and risk of loss passes to Best Buy
Purchasing LLC upon delivery to Best Buy at the destination
specified by Best Buy, which may include but is not limited to
its stores, distribution centers, and third-party fulfillment
providers. Vendor is encouraged to utilize Best Buy's
preferred carriers to improve on-time performance, minimize
transit times and reduce the need for expedited shipments.
- Existing Vendor Conversion to FOB Origin, Freight
Collect and Allowed Terms: In the event Vendor
currently ships Product to Best Buy FOB Destination,
Freight Prepaid by Vendor, Vendor may be converted to
the preferred FOB Origin, Freight Collect and Allowed
terms as described above, via its Collaborative
Transportation Management Program ("CTM"). Under CTM,
Best Buy will receive a negotiated freight allowance
from the vendor in exchange for assuming the expenses
associated with inbound carrier freight previously
born by Vendor. Freight allowance to be paid to Best
Buy with respect to FOB Origin, Freight Collect and
Allowed terms will be agreed between the parties in
writing and attached hereto as the Freight Allowance
Agreement. For example, the negotiated freight
allowance can reflect a flat percentage of invoice
value (ad valorem), or dollars and/or cents per
pound, or dollars and/or cents per box or as actual
freight expense incurred.
- Expedited Shipments: Terms for expedited shipments
will be FOB Origin, Freight Collect. The parties will
determine responsibility for expedited shipment
expenses on a case by case basis depending upon which
party caused the need for the expedited shipment; In
the event current shipping terms are FOB Origin,
Freight Collect and Allowed, and the parties
determine that the need for an expedited shipment was
not the fault of Vendor, Vendor shall still be
responsible for reimbursing Best Buy for the agreed
Freight Allowance expense.
- Shipping and Routing Guide: Vendor shall follow the
terms and conditions stated in Best Buy's Shipping
and Routing Guide, attached hereto as Exhibit B.
- Other Charges: Any and all charges related to special
requests of Vendor to carrier, including loading
assistance, detention, or any other instructions,
prior to title passage, are the responsibility of the
Vendor.
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- Direct Import Agreement: Terms for directly imported
Products will be set forth in a Direct Import
Agreement, which may be attached hereto.
- Xxxx of Lading: Vendor shall use the standard Xxxx of
Lading form, attached hereto as Exhibit C.
5. Shipping Performance Management.
- Right Time: Vendor agrees to deliver Product on a
timely basis to Best Buy at the FOB point in
accordance with the prearranged delivery and/or
pick-up dates the parties agree upon from time to
time. For FOB Origin, Freight Collect terms, Product
must be ready for delivery to Best Buy on the pick-up
date agreed upon by the parties. For FOB Destination,
Freight Prepaid terms, Product must be delivered to
Best Buy within two days of the delivery date
committed to by Vendor. In the event Vendor is in
breach of this "Right Time" shipping commitment, Best
Buy may issue a charge-back to Vendor (subject to the
limitations set forth in this Section 5) in each
instance of breach, for 1 % of the total cost of the
particular Stock Keeping Unit ("SKU") subject to the
breach, as identified on the corresponding PO for
each day early or late, as the case may be, up to a
maximum of 5%. Such amount shall be considered
liquidated damages, as it is reasonable in light of
Best Buy's anticipated loss for Vendor's
non-conformance.
- Right Quantity: Vendor agrees to deliver the right
quantity of Product to Best Buy in accordance with an
accepted PO. However, Best Buy shall consider a
PO-SKU-Line quantity variance of up to 3% or 5 units,
whichever is more, a conforming delivery. In the
event that Vendor delivers a non-conforming quantity,
Best Buy may issue a charge-back to Vendor (subject
to the limitations set forth in this Section 5) for
an amount equal to the quantity non-conformance
percentage multiplied by the total cost of the
particular SKU subject to the non-conformity, as
identified on the corresponding PO; not to exceed a
maximum of 5%. Such amount shall be considered
liquidated damages, as it is reasonable in light of
Best Buy's anticipated loss for Vendor's non-
conformance.
- Program Implementation: Vendor agrees to comply with
Best Buy's implementation schedule for the Shipping
Performance Management Program, as described above
(Right Time; Right Quantity), Upon notice to Vendor
of the commencement of the Program, Best Buy will
provide information concerning Vendor's shipping
performance to Vendor for a period of not less than 8
consecutive weeks and not more man 12 consecutive
weeks ("Implementation Period"). Vendor will not be
subject to charges for shipping non-conformance
during or before the Implementation Period. Following
the Implementation Period, Vendor will be subject to
the charges for shipping non-conformance as specified
in this Section 5. Best Buy will identify and report
incidents of Vendor's non-conforming shipments and
make available information concerning each incident
for 4 weeks so Vendor may investigate and assess the
validity of each incident of shipping non-conformance
reported by Best Buy.
- Achieving Shipping Performance Standards: If Vendor
maintains shipping conformance for Right Time and
Right Quantity at a rate of 80% or better for a
period of 13 consecutive weeks based upon the total
PO-SKU-Lines ordered by Best Buy, Best Buy will
suppress future charges for non-conformance, provided
that Vendor continues to maintain weekly shipping
performance at or above 80% conformance. In the event
unforeseen circumstances prevent Vendor from
maintaining this 80% threshold, Vendor will be
permitted to perform below 80% for 2 weeks of a
rolling 6-week period without reinstatement of
charges for non-conformance. If Vendor first
qualifies for suppression of charges but then later
fails to maintain the 80% threshold performance
standard or its limited exception for unforeseen
circumstances, Vendor must reestablish shipping
standards of 80% or greater for 13 consecutive weeks
before non-conformance charges will again be
suppressed.
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6. Price Protection; Notice of Price Increases.
- Price Protection: Best Buy may apply to receive price
protection credit upon the effective date of a price
decrease as to the Products in Best Buy's on-hand
inventory, which shall include Product wherever
located (e.g., inventory located in stores,
warehouses, return canters and Product in transit
between these locations or from Vendor to Best Buy).
Best Buy will determine its on-hand inventory as of
the effective date of price protection and will
submit a cost adjustment claim to Vendor for payment.
Price protection adjustments to in-transit Product
shall be reflected on the purchase orders prior to
them being received into Best Buy distribution
centers. Best Buy's right to receive price protection
credit under this Section 6 is subject to and shall
be made in accordance with the terms of Vendor's
then-current Retailer Manual. Subject to Best Buy's
right to conduct post-audit reconciliation, the
Retailer Manual shall require at a minimum that Best
Buy submit documentation to Vendor showing inventory
eligible to receive price protection credit within
[*] after the effective date of the price decrease.
- Notice of Price Increases: Vendor will give Best Buy
[*] prior written notice of the effective date of any
increases to the cost of Product to Best Buy. Price
increases are based on the purchase order
acknowledgement date, not the shipment or purchase
order date.
7. Returns. Best Buy shall have the right to return at [*] any
Products (i) that infringe upon any patent, trademark, trade secret, copyright,
right of privacy or publicity, or any other tangible or intangible proprietary
or intellectual property right; (ii) that are not manufactured, packaged, or
labeled in accordance with applicable laws, ordinances, rules, and regulations;
(iii) that are shipped in error or in non-conformance with Best Buy's purchase
order; or (iv) that are damaged or defective, or where use of such Products has
caused injury to person or property.
For the purposes of this Agreement, the term "defective," when referring to the
Products means+
- Product that has defects covered by the warranty specified in
the documentation that accompanies the Product when shipped;
or
- Product that has been returned by a customer in accordance
with Best Buy's return policy after the customer has opened
the Product (i.e. the wrapping, seal, or box has been opened),
but in no event more than one year after the last applicable
model receipt by Best Buy from Vendor, regardless of whether
the Product is otherwise defective.
Before returning any Product, whether for warranty or non-warranty
action (including exchanges under Section 10 of this Agreement), Best Buy must
obtain a return authorization ("RA") number from Vendor. Vendor agrees to
provide a RA number, where appropriate and in accordance with this Agreement,
[*] of request. Vendor also agrees to allow delivery of return product as of the
day the RA number is issued to Best Buy, subject to the following:
(i) Vendor need not accept shipments of return Products that
Vendor receives more than [*] after its issuance of a RA
number;
(ii) Best Buy shall prepay shipping charges for all defective
Product returns (in connection with the return shipment for
warranty items, Best Buy may issue a charge-back to Vendor for
reimbursement of Best Buy's reasonable shipping charges);
(iii) If an appointment is required for Best Buy's return delivery,
Vendor agrees to provide an appointment within 3 days of the
carrier's expected time of arrival; and
(iv) Vendor need not accept any Product that is returned other than
in accordance with the terms of this Agreement.
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Any and all changes to Vendor contact personnel must be communicated as
soon as commercially practicable to the following address:
Best Buy Co., Inc.
Returns Department
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Within 90 days alter Vendor's receipt of a Product returned to Vendor
in accordance with the terms of this Agreement, Vendor shall either:
(a) issue and send to Best Buy a credit memo in the amount of Best
Buy's net purchase price for the returned Product (such credit
memo shall reference either Best Buy's RGM number or the RA
number); or
(b) if Vendor receives Product from Best Buy that Vendor believes
is non-returnable, Vendor shall contact Best Buy and promptly
ship such Product back to Best Buy's originating Product
returns location (in this case, the shipment cartons must
reference the original return shipment's RA or RTV number).
8. Debit Balances. If Vendor has a "Debit Balance" (defined as
any balance due and owing from Vendor to Best Buy), the amount owed may be
deducted by Best Buy from the next payment to Vendor. If there is no outstanding
balance due to Vendor, then Vendor shall pay the debit balance to Best Buy in
full, [*] notification from Best Buy. If the amount owed is disputed, Vendor and
Best Buy agree to use commercially reasonable to reconcile the account and, in
any event, Vendor shall remit payment of the undisputed amount to Best Buy [*]
of notification. Payment shall be made in the form of check or wire; payment via
a credit memo is not acceptable.
9. Discontinued Product. A "Discontinued Product" means any
Product that Vendor has stopped manufacturing or any Product that undergoes a
material change in appearance or packaging. Vendor will use commercially
reasonable efforts to provide Best Buy with at least [*] advance written notice
of the occurrence of a Discontinued Product, or as soon as possible in the event
that the discontinuance is caused by actions taken by a component part supplier
of Vendor. Upon notice of such Discontinued Product, Best Buy may, without
penalty or liability, cancel any outstanding purchase orders pertaining to the
Discontinued Product. With respect to Best Buy's existing inventory of
Discontinued Product, Vendor and Best Buy shall negotiate in good faith to
determine the proper disposition of such inventory.
10. Electronic Data Interchange; Web-Based Electronic Commerce. As
a condition to entering into this Agreement, the parties agree to exchange
certain documents electronically via (i) traditional Electronic Data Interchange
("EDI"); or (ii) Web-Based Electronic Commerce ("EC"). In particular, the
parties shall exchange the following documents via either EDI or EC:
Required:
- Purchase Order ("PO"): EDI850. Vendor must be compliant with
EDI or EC within 2 months of its receipt of the first PO from
Best Buy (Vendor will not accept verbal purchase orders unless
confirmed by an EDI850).
- Electronic Invoices: EDI810. Vendor must be compliant on EDI
or EC within 3 months of its receipt of the first PO from Best
Buy.
- Purchase Order Changes: EDI860. Vendor must be compliant on
EDI or EC within 2 months of its receipt of the first PO from
Best Buy.
- Advance Ship Notice ("ASN"): EDI856. including UCC128 barcode
direct to store orders. Vendor must be ready to test for ASN
compliance on EDI or EC within 6 months of its receipt of the
first PO from Best Buy, or upon Best Buy's request thereafter
based upon Best Buy's priority schedule.
- Functional Acknowledgement: EDI997. Vendor shall send EDI997
so that it is received within 2 business days of Best Buy's
PO.
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Optional:
Along with the required documents identified above, Vendor must use
reasonable efforts to explore the possibilities of implementing the following
documents:
- Product Activity: EDI852 (sales and inventory information,
delivered weekly to Vendor by Best Buy).
- Store Text Message: EDI864 (store addresses).
- Other EDI documents as they become available.
Additional Requirements:
- Prior to its acceptance of a Best Buy PO, Vendor must ensure
all Products will be marked with a valid UPC number, as well
as ensuring that such Products are setup in the Best Buy
system.
- At Best Buy's request, Vendor must re-send all electronic
documents using a new EDI ISA control number. Vendor must
ensure duplicate transmissions are not fed into Vendor's
database. Best Buy will not accept duplicate shipments and
will return such shipments at Vendor's expense (including any
carrying and handling costs).
- Traditional EDI must be set up directly with the Vendor, not
through a third-party service or sales representative.
11. Product Exchanges; Vendor Program Agreement. As part of Best
Buy's promotion of the Products, Best Buy shall perform the "Retailer's
Responsibilities" described in Vendor's Retailer Manual, subject to an in
accordance with those particular terms of Vendor's Retailer Manual. In order to
facilitate Best Buy's management of its inventory of Products, Best Buy may
exercise the "Product Exchange Privileges" described in Vendor's Retailer
Manual, subject to an in accordance with those particular terms of Vendor's
Retailer Manual.
Best Buy and Vendor may agree upon additional business terms from time
to time concerning matters such as payment terms. Market Development Funds
("MDF") payment, stock rotation, volume rebates, new store allowances, etc. If
agreed upon, such terms shall be contained in the attached Vendor Program
Agreement, as amended form time to time by the parties.
12. Service. Best Buy is committed to meeting our customer's high
expectations concerning post-sale service and warranty repairs. Accordingly,
Vendor shall perform technical support described in the "Netgear's
Responsibilities" section of Vendor's Retailer Manual, subject to and in
accordance with the terms of the Retailer Manual. A comprehensive Product
Service Agreement between the parties may also be necessary to ensure customer
satisfaction. Unless otherwise determined by Best Buy, the attached Product
Service Agreement, if attached, controls the servicing and warranty repairs of
the Products and must be signed simultaneously with or prior to the signing of
this Agreement.
13. Proprietary Rights. Vendor grants Best Buy a license
to use, exhibit, reproduce, publish, publicly perform the Vendor trade names,
trademarks and service marks set forth in the attached Vendor's Retailer Manual
(the "Vendor Trademarks"), only as described in the attached Vendor's Retailer
Manual, and only to promote, advertise and sell the Products. Further, Vendor
may provide to Best Buy, without limitation, Product specifications, images, and
other textual, graphical and/ or multimedia content regarding the Products for
use in preparing advertising and promotional material ("Vendor Content"). Vendor
hereby grants Best Buy a license to use, exhibit, excerpt, reformat, modify,
reproduce, publish, publicly perform and transmit via the Internet and otherwise
use such Vendor Content for the purpose of advertising and promoting the
Products. Upon termination of this Agreement, Best Buy may continue to advertise
and promote the Products, using the Vendor' Trademarks and Vendor Content until
inventory depletion. Best Buy acknowledges that Vendor is the exclusive owner of
the Vendor Trademarks and that this Agreement does not grant Best Buy any right,
title or interest in or to the Vendor Trademarks. Further, all use of the Vendor
Trademarks by Best Buy inures solely and exclusively to Vendor's benefit. This
Agreement does not grant Vendor any right or license to use Best Buy's trade
names, trademarks or service marks, promotional material, copy, graphics,
themes, strategies, inventions, program, and files without first obtaining Best
Buy's express written approval.
-6-
14. Software. Best Buy may procure for and distribute licenses to
use Vendor software ("Software") and accompanying documentation by placing
orders under this Agreement. The terms of the licenses for such Software to
which end-users are subject are included as a "shrink-wrap" license agreement
with the Software and in its accompanying documentation when shipped by Vendor
(the "License Agreement").
15. Confidentiality. The terms and conditions (but not the
existence) of this Agreement, the Software and its documentation, and any
information marked as confidential or, regardless of form
(written/electronic/oral) or marking, is of the nature that a reasonable person
would understand its owner would not want it disclosed to the public will be
considered to be Confidential Information. Further, Confidential Information
shall also include (i) matters of a technical nature such as trade secret
processes or devices, know-how, data, formulas, inventions (whether or not
patentable or copyrighted), specifications and characteristics of products or
services planned or being developed, and research subjects, methods and results,
(ii) matters of a business nature such as information about costs, profits,
pricing, policies, markets, sales, suppliers, customers, product plans, and
marketing concepts, plans or strategies, (iii) matters relating to project
initiatives and designs, (iv) matters of a human resources nature such as
employment policies and practices, personnel, including individual names,
addresses, and telephone numbers; compensation and employee benefits, (v) other
information of a similar nature not generally disclosed to the public. Each
party agrees not to disclose Confidential Information except to employees on a
third party subject to a similar confidentiality agreement, which have a need to
know to perform their responsibilities. Each party agrees to take at least the
same precautions to protect Confidential Information as such party would utilize
to ensure the protection, confidentiality and security of its own confidential
information. Each Party, at its own expense, will properly use security
procedures which are reasonably sufficient to ensure that all transmissions of
documents are authorized and to protect its business records and data from
improper access.
Upon the expiration or earlier termination of this Agreement, a party
may, in writing, request either the prompt return or destruction, and a written
certification of such destruction, of any Confidential Information provided to
the other party.
Notwithstanding the foregoing, each Party may disclose the terms and
conditions of this Agreement: (i) as required by any court or other governmental
body; (ii) as otherwise required by law; (iii) to legal counsel of the parties;
(iv) in connection with the requirements of a public offering or securities
filing; (v) in confidence, to accountants, banks, and financing sources and
their advisors; (vi) in confidence, in connection with the enforcement of this
Agreement or rights under this Agreement; or (vii) in confidence, in connection
with a merger or acquisition or proposed merger or acquisition, or the like.
16. Vendor Obligations
Vendor shall provide to Best Buy, at no charge, adequate copies of any
necessary training and Product information brochures, and will assist with the
training of Best Buy personnel on Best Buy's premises as reasonably necessary so
that Best Buy's sales and service personnel will be adequately knowledgeable
with respect to the Products, Vendor must deliver Product samples on a timely
basis to Best Buy and provide Best Buy with detailed and accurate information
concerning product specifications and end-user warranties for all Products.
Vendor shall use best efforts to begin to include security source tagging
technology inside Product packaging.
Vendor shall notify Best Buy within ten (10) days: (a) regarding the
existence and nature of Vendor's knowledge of any material non-compliance with
applicable laws (or any reasonable possibility thereof) to the extent the
non-compliance relates to the Products that Vendor provides to Best Buy under
this Agreement, or (b) if Vendor receives notice of a claim from a consumer
(which, individually or in the aggregate, may reasonably be expected to result
in material liability to Vendor and/or Best Buy) that a Product is defective or
does not comply with all applicable laws.
17. Representations and Warranties. Vendor represents and warrants
to Best Buy that:
- Vendor has the authority to enter into this Agreement
and that the persons signing this Agreement on behalf
of Vendor are authorized to sign.
-7-
- The Products shall conform with Vendor's applicable
standard end-user Product warranty during the
specified warranty period.
- It will comply with all applicable laws and
regulations in performing its obligations under this
Agreement, including but not limited to laws and
regulations pertaining to product design,
manufacture, packaging and labeling and, if
applicable, importation, the Foreign Corrupt
Practices Act, and laws and treaties designed to
protect human rights.
Best Buy acknowledges that Vendor's end-user warranties do no apply to
any Product that has been: (i) altered, except by Vendor or in accordance with
its instructions, or (ii) used in conjunction with another vendor's product if
such use results in the defect, or (iii) damaged by improper environment, abuse,
misuse, accident or negligence. Replacement parts furnished under this warranty
may be refurbished or contain refurbished components.
THE FOREGOING VENDOR WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES
EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY LIMITATION WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. ANY PRODUCT THAT IS IDENTIFIED IN THE PRICE
LIST AS AN "AS IS" PRODUCT, IS FURNISHED "AS IS" WITH NO WARRANTIES OF ANY KIND.
Best Buy represents and warrants to Vendor that:
- Best Buy has the authority to enter into this Agreement, and
that the persons signing this Agreement on behalf of Best Buy
are authorized to sign.
- Best Buy agrees to exert commercially reasonable efforts to
promote and sell the Products consistent with Best Buy's
sales, marketing and merchandising plans, as may be amended
from time to time in Best Buy's sole and reasonable
discretion.
- It will comply with all applicable laws and regulations in
performing its obligations under this Agreement.
18. Liability Limitations. EXCEPT FOR LIABLITY ARISING FROM AN
INDEMNIFICATION OBLIGATION, BREACH OF CONFIDENTIALITY, GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR SPECIAL,
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING ANY SUCH DAMAGES
RESULTING FROM INACCURATE OR LOST DATA OR LOSS OF USE OR PROFITS ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT, THE FURNISHING OF SERVICES, OR THE USE OR
PERFORMANCE OF PRODUCTS, EVEN IF INFORMED OF SUCH DAMAGES.
19. Term and Termination.
Term: This Agreement will commence upon the effective date,
which shall be the date when it has been fully executed by authorized
representatives of both parties, and shall continue until it is terminated
according to its terms.
Termination: Either party may terminate this Agreement at any
time without cause upon 90 days written notice to the other party. In the event
of a material breach of this Agreement, this Agreement may be terminated
immediately by the non-breaching party, provided that notice describing the
breach has been provided to the breaching party and the breaching party has
failed to cure such breach within 30 days of receipt of notice.
20. Indemnification. Vendor will indemnify, defend, and
hold Best Buy harmless from and against any and all third-party claims, actions,
liabilities, losses, costs and expenses ("Claims") arising from or in connection
with this Agreement or the Products provided under this Agreement, if and to the
extent the Claim is based on an allegation that: (i) a Product infringes a
United States, Canadian or European Union-based patent or any copyright,
trademark, trade secret or other valid intellectual property right; or (ii) a
negligent act or omission of Vendor, including but not limited to Claims based
upon bodily injury, death, or destruction of physical property (other than the
Products); or (iii) the Products, or use thereof, caused personal injury, death
or real or personal property damage.
-8-
Further, Vendor agrees to fully indemnify, defend and hold Best Buy
harmless against any reasonable Claims, losses, costs and expenses resulting
from a voluntary or government initiated product recall.
For infringement Claims, Vendor may, at its option and expense, procure
the right for the end user to continue using the Product, replace or modify the
Product so that it becomes non-infringing (if practical in the reasonable
opinion of both parties), or accept a return of the Product and refund an amount
equal to the price paid by Best Buy for the infringing Product.
Each party agrees to indemnify, defend and hold the other harmless from
and against any and all Claims arising from or in connection with its own
failure to comply with all applicable laws, rules and regulations while
performing its obligations under this Agreement.
Vendor's indemnity obligations do no apply to any Claims to the extent
arising from: (i) Best Buy's alterations to Products, (ii) Best Buy's use of
Products in conjunction with another vendor's product, (iii) damage to Products
by Best Buy's improper environment, abuse, misuse, accident or negligence; or
(iv) any of the foregoing acts or omissions, whether or not committed by Best
Buy, if Best Buy directed or encouraged the acts or omissions, and such directed
or encouraged acts or omissions are not in accordance with the Product's
instructions.
Each party's indemnity obligations are conditioned on the other giving
the indemnifying party prompt written notice of any Claims, tendering the
defense of all Claims to the indemnifying party, reasonably assisting the
indemnifying party in that defense (the indemnifying party to pay the other's
reasonable out-of-pocket expenses), and to granting the indemnifying party the
right to control settlement and resolution. The indemnifying party has no
obligation to pay any costs of liability, settlement and defense, including
attorney fees and costs, agreed to by the other party without the indemnifying
party's consent, provided that the indemnifying party is fulfilling its
indemnity obligations.
21. Insurance. Vendor agrees to procure and maintain Comprehensive General
Liability Insurance with limits not less than [*]. Best Buy shall be added to
such coverage as an additional insured with respect only to the operations of
Vendor. Vendor shall provide a Certificate of Insurance evidencing such
insurance and providing that Vendor's insurers shall provide Best Buy with 30
days advance written notice of cancellation of such policies.
22. Assignment. This Agreement may not be assigned by either party without
first obtaining the other party's express written consent, which consent shall
not be unreasonably withheld; provided, however, that either party may assign
this Agreement, without obtaining the other's express written consent, to (i) a
successor corporation resulting from a merger, consolidation, or non-bankruptcy
consolidation or to a purchaser of all or substantially all of the assigning
party's assets or a majority, or controlling interest in the assigning party's
voting stock, provided that the purchaser's net worth at the time of purchase is
equal to or greater than that of the assigning party; and (ii) a present or
future subsidiary or affiliate. Any attempted assignment in violation of this
Agreement shall be null and void.
If Vendor assigns payments to an assignee/factor, Vendor understands and agrees
that Vendor and the assignee/factor will be required to sign Best Buy's standard
acknowledgement form to assure Best Buy that assignee/factor understands the
rights being assigned
23. Audit Rights. Each party shall have the right to audit the other party
to assure compliance with the obligations (including the proper
issuance or taking of charge backs, credit memos and deductions) under
this Agreement. Audits under this Section 23 shall only be conducted:
(a) upon reasonable prior written notice to the audited party; (b) at
reasonable times; (c) during regular business hours; (d) at the
auditing party's expense (except as set forth below); (e) no more than
once per calendar year; and (f) no more than once with respect to
particular records. All information obtained by the auditing party in
the course of an audit shall be considered Confidential Information of
the audited party. If the audit reveals that a party is not performing
in material compliance with its payment obligations under this
Agreement, then, in addition to any other legal and equitable rights
and remedies available, the party not in compliance shall reimburse the
other for the reasonable costs of the audit.
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24. Claims and Charge-backs.
- Claims: Neither party hereto may raise a claim of any
nature relative to this Agreement more than 2 years
after the date of any such cause of action accrued.
- Charge-backs and Credits: [*]. Vendor agrees to use
Best Buy's Dispute Control Document, available at
xxx.xxxxxxxxxxxxxxxxx.xxx. to communicate any such
denials. If no denial is sent to Best Buy within 90
days, Best Buy will assume the charge-backs or credit
requests were accepted by the Vendor, and Vendor
hereby agrees not to contest such deductions or
credit requests.
3. 24. Avoidance of Conflict of Interest; Code of Conduct Standards.
Vendor agrees to respect and abide by Best Buy's conflict of interest and code
of conduct policies, which may be amended from time to time and which will be
made available to Vendor upon request. Vendor agrees to contact Best Buy's Open
Line (0-000-000-0000) for information concerning Best Buy's policies and to
discuss any ethical or conduct concerns that they may have as a result of their
contact with Best Buy personnel. Vendor understands and acknowledges that Best
Buy's conflict of interest and code of conduct policies address Vendor-paid
travel, gifts and gratuities, offering and accepting bribes, family members and
close personal relationships involving employees of both parties, personal
investments in the other party, Vendor-sponsored charitable and other events,
Vendor product samples, Vendor promotional copies, direct personal purchases
from Vendors by Best Buy employees, and awards, incentives and other spiffs from
vendors. Vendor agrees to avoid conflict of interest situations with Best Buy,
to deal in arms length negotiations with Best Buy, and to contact Best Buy's
Open Line to address Vendor's concerns. Best Buy similarly agrees to abide by
Vendor's policies concerning this subject matter
4. 25. Force Majeure. Neither party shall be in breach of this Agreement
solely due to causes beyond the control and without the fault or negligence of
such party. Such causes may include, but are not restricted to, acts of God or
of a public enemy, acts of the government in either its sovereign or contractual
capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight
embargoes, power failure, or failure of the U.S. postal system, but in every
case the failure to perform must be beyond the control and without fault or
negligence of the party failing to perform.
5. 26. Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if hand-delivered or mailed by either
registered or certified mail, return receipt requested, or by nationally
recognized overnight courier service, receipt confirmed. In the case of notices
via first-class mail or courier service, notices shall be deemed effective upon
the date of receipt or upon the date returned for non-delivery. Notices shall be
addressed to the parties as set forth below, unless either party notifies the
other of a change of address, in which case the latest noticed address shall be
used:
Notices to Vendor: Notices to Best Buy:
NETGEAR, INC. Best Buy Co., Inc.
Attn: Attn: Sr. VP, Merchandising
Copy To: General Counsel, Legal Dept. Copy To: General Counsel, Legal
0000 Xxxxx Xxxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000 0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
6. 27. General.
Relationship of the Parties: The relationship between the
parties shall be that of independent contractor. Nothing herein shall be
construed as creating or consulting the relationship of employer/employee,
franchisor/franchisee, principal/agent, partnership, or joint venture between
the parties. Neither party may bind the other, incur any obligation on the
others behalf, or represent itself as the other's agent in any way that might
result in confusion as to the fact that the parties are separate and distinct
entities.
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(a) Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of Minnesota.
Enforceability: If any provision of this Agreement is held to
be unenforceable by a court of competent jurisdiction, such provision shall be
more narrowly and equitably construed so that it becomes legal and enforceable,
and the entire Agreement shall not fall on account thereof and the balance of
the Agreement shall continue in full force and effect.
No Waiver: Any of the provisions of this Agreement may be
waived by the party entitled to the benefit thereof. Neither party will be
deemed, by any act or omission, to have waived any of its right or remedies
hereunder unless such waiver is in writing and signed by the waiving party, and
then only to the extent specifically set forth in such writing. A waiver with
reference to one event will not be construed as continuing or as a bar to or
waiver of any other right or remedy, or as to a subsequent event.
Counterparts and Electronics Signature: This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument. This
Agreement may be executed by facsimile or other "electronic signature" (as
defined in the Electronic Signatures in Global and National Commerce Act of
2000) in a manner agreed upon by the parties hereto.
Entire Agreement; Amendments: This Agreement, including the
exhibits attached hereto, contains the entire Agreement between the parties with
respect to the subject matter hereof, supersedes all prior agreements,
negotiations and oral understandings, if any, and may not be amended,
supplemented, or modified in any way, except by an amendment in writing and
signed by authorized officers of the parties hereto. No amendment shall be
affected by the acknowledgement or acceptance of a purchase order, invoice, or
other forms stipulating different terms. This Agreement shall inure to the
benefit of and be binding upon each of the parties and their permitted
successors, assigns, heirs, executors, administrators, trustees and legal
representatives.
Headings: Headings used in this Agreement are for the purposes
of convenience only and shall not affect the legal interpretation of this
Agreement.
Draftsmanship. Each of the parties hereto has been represented
by its own counsel. In the event of a dispute, no provision of this Agreement
shall be construed in favor of one party and against the other by reason of the
draftsmanship of this Agreement.
Survival: The expiration or termination of this Agreement
shall not terminate vested rights of either party from any liabilities or
obligations incurred under this Agreement prior to and which by their nature are
intended to survive expiration or termination, including but not limited to
provisions relating to confidentiality, indemnification, and proprietary rights.
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THE PARTIES HAVE MADE THIS AGREEMENT EFFECTIVE AS OF THE DATE LAST SIGNED BELOW:
BEST BUY CO., INC. VENDOR : NETGEAR, INC.
Authorized Officer: /s/ Xxxxxxx Xxxxxx Authorized Officer: /s/ [ILLEGIBLE]
------------------- ------------------
(Signature) (Signature)
Name: Xxxxxxx Xxxxxx Name: XXXXXXX XX
------------------------ ------------------------
(Please Print) (Please Print)
Title: [ILLEGIBLE] Title: CEO
-----------------------
Date: 9-24-01 Date: 9/20/01
------------------------
BEST BUY PURCHASING LLC.
Authorized Officer: /s/ Xxxxxxx Xxxxxx
--------------------
(Signature)
Name: Xxxxxxx Xxxxxx
--------------------
(Please Print)
Title:
--------------------
Date: 9-24-01
EXHIBITS
The following Exhibits are hereby incorporated into and made part of this
Agreement:
Exhibit A Products and Pricing
Exhibit B Shipping and Routing Guide
Exhibit C Standard Xxxx of Lading
Exhibit D Vendor's Retailer Manual
ADDENDUMS (CHECK IF APPLICABLE AND ATTACH)
If checked below, the following Addendum(s) are hereby incorporated
into and made a part of this Agreement:
[x] Marketing Program Agreement [ ] Solution Plus Rebate Agreement
[x] Product Services Agreement [ ] Direct Import Agreement
[ ] Freight Allowance Agreement [ ] Configure to Order Agreement
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT A
PRODUCTS AND PRICING
[NETGEAR(TM) LOGO]
[*]
[*]
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[*]
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[*]
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[*]
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[*]
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[*]
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[*]
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EXHIBIT B
SHIPPING AND ROUTING GUIDE
EXHIBIT C
STANDARD XXXX OF LADING
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT D
NETGEAR
RETAILER MANUAL
Congratulations on becoming an authorized NETGEAR Retail Outlet Retailer.
As a NETGEAR Retailer, you are eligible to place orders directly with NETGEAR
and take advantage of a number of programs designed to allow you to succeed in
your sale of our products. The following material describes the procedures,
programs, requirements for participation and each of our respective obligations
under the NETGEAR Retailer program.
As NETGEAR grows we anticipate that these procedures and programs will also grow
and change. As changes are made or new programs are added, we will send you
updates to this manual.
ORDERING NETGEAR PRODUCTS
Orders for NETGEAR products should be transmitted via EDI pursuant to
Section 10 of the Vendor Agreement.
Please include the following information in your electronic purchase
order:
(a) Retailer's Purchase Order number;
(b) Product number and description for each item ordered;
(c) Desired quantities;
(d) Purchase price for each Product ordered;
(e) Requested ship date(s);
(f) Order expiration date (the date upon which your order
will automatically expire if shipment against the order has not begun);
(g) Preferred shipping method (if your Agreement with
NETGEAR requires payment of shipping charges) agreement with NETGEAR;
and
(h) and Exact "Xxxx to" and "Ship to" address.
Orders submitted without this information may not be accepted or may be
delayed in processing.
INVENTORY PRICE PROTECTION
Protecting your inventory investment is key to your success in
promoting NETGEAR products. We recognize this and are pleased to offer you
limited inventory price protection in the event of a reduction in the list price
of NETGEAR products.
In the event of a List Price decrease on any of the NETGEAR Products,
you may apply for a credit on those units of Product which were shipped by
NETGEAR to you and which remain unsold in your inventory [*].
The amount of the credit on any unit shall be equal to [*].
In order to receive a credit, but subject to Best Buy's right to
conduct post-audit reconciliation a) you must submit to NETGEAR within [*] of
the effective date of the list price decrease, a report of inventory eligible
for the price credit. Upon verification by NETGEAR of the eligible units and
credit amounts, NETGEAR will issue a credit to your account.
PRODUCT EXCHANGE PRIVILEGES
In order to allow you to manage your inventory of NETGEAR products, you
may return previously purchased NETGEAR products for replacement by an equal or
greater value of different NETGEAR products, under the following conditions:
1) Products may be returned [*] per year, but no more
frequently than once per calendar quarter.
2) The total value of the returned NETGEAR products may
not exceed [*] of the net shipments invoiced by NETGEAR for all products, less
any credits granted, during the immediately preceding [*] period.
3) The replacement NETGEAR products ordered must not be
identical to the returned products.
4) The returned Products are either on the then current
NETGEAR Price List or were removed from the Price List no more than [*] prior to
the effective date of the then current Price List.
5) The returned products must be in their original
shipping containers and may not have been altered, damaged or used.
You will be issued an invoice for the replacement Products at prices in
effect at the time of return, and credited for the value of the returned
products at the prices actually paid by you less any prior credits.
RETAILER'S RESPONSIBILITIES
Active participation by you in the promotion of our products is
essential to both your and our success. As such, as part of being authorized as
a NETGEAR Retailer, we require that, at the minimum, you provide the following
services to your reseller customers:
1. Promotion and sale.
As a NETGEAR Retailer, you are required to make commercially
reasonable efforts to market, promote, sell, support, and otherwise create and
increase demand for the products by end-users through means that you normally
employ to promote the products of other manufacturers, subject to your marketing
plans and strategies that you determine in your sole and reasonable discretion.
2. Technical Support.
As an authorized NETGEAR Retailer, you are the primary point
of contact for your customers in all support situations.
3. Training.
Success as a NETGEAR Retailer requires that you adequately and
thoroughly train on an on-going basis, a sufficient staff of qualified sales,
marketing, technical and support personnel familiar with the applications,
features, benefits, operation and configuration of the Products. This will allow
you to effectively promote and support the products and to assure the
satisfaction of your resellers and the end-users.
4. Records and Reports.
Prior to requesting inventory price protection or stock
rotation privileges, you must submit a report to NETGEAR listing all current
inventory of NETGEAR Products.
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NETGEAR'S RESPONSIBILITIES
A. Technical Support.
NETGEAR will provide technical support to you in order to
assist you in resolving reseller and end user technical problems. This support
will be provided by NETGEAR from any of its technical support facilities.
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TRADEMARK USAGE
GUIDELINES
OVERVIEW
NETGEAR offers a highly visible product line. Trademarks, Service Marks
and other similar indicators of product origin (collectively "Trademarks") of
NETGEAR are owned by NETGEAR, Inc. As a result, NETGEAR has registered or
applied to register product names (including NETGEAR) and other descriptive
features with the United States Patent and Trademark Office and appropriate
agencies in important markets worldwide to protect its claim to specific names
and other trademarks and service marks. Trademarks and service marks are vital
elements that enable a company to identify its products and distinguish them
from others on the market. Trademarks give a company legal "ownership" of a
given name, slogan or title and allows the company to collect damages from
others who may infringe on the right or misrepresent the company through
improper use of the name.
MARKING
Wherever one of NETGEARs' registered trademarks is used, the "(R)"
label must be attached to the xxxx the first time it is used in the text body
particular piece. Wherever one of NETGEARs' unregistered trademarks is used, the
"TM" label must be attached to the xxxx the first time it is used in the text
body of that piece. In addition, the xxxx must be properly designated as a
registered trademark or a trademark NETGEAR, Inc. in the accompanying credit
line.
HOW TO USE NETGEARS' TRADEMARKS
1. IDENTIFICATION MUST OCCUR AT LEAST ONCE IN EACH DOCUMENT OR OTHER PRINTED
PIECE.
The trademark designation must appear on the first appropriate reference;
once used, it is not required throughout the rest of the document.
2. TRADEMARKED NAMES MUST APPEAR AS PROPER ADJECTIVES, FOLLOWED BY A GENERIC
PRODUCT NAME.
For example: CORRECT: "Use the NETGEAR(TM) family of networking products."
INCORRECT: "NETGEAR(TM) is the answer to your networking
needs."
3. A TRADEMARK IS NEVER POSSESSIVE.
For example: CORRECT: "NETGEAR(TM) networking products."
INCORRECT: "NETGEAR's(TM) networking products."
4. A TRADEMARK IS ALWAYS SINGULAR.
For example: CORRECT: "The NETGEAR(TM) hub resides...."
INCORRECT: "NETGEARs(TM) are installed...."
THE NETGEAR LOGO
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The following have been selected for the color options for the NETGEAR
logo:
- PMS-2745 in the Pantone Matching System
- Black or xxxx screened
- White type on black (reverse type)
TRADEMARK LISTS
Subject to the provisions of your Agreement and this manual, you are
authorized to use the following Trademarks in the advertising and sale of
NETGEAR Products:
NETGEAR(TM)
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