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CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.17
[HANDSPRING LOGO]
Retail Distribution Agreement
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This agreement ("Agreement") is entered into between Handspring, Inc.
("Handspring") a California corporation having offices at 000 Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000 and CompUSA, Inc., ("Reseller") a Delaware corporation
having offices at 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxx, XX 00000.
Whereas, Handspring sells a line of handheld computers and associated
accessories;
Whereas, Reseller is in the business of reselling computer products;
Whereas, Handspring desires to engage the Reseller for the purposes of
marketing and selling Handspring's handheld computers and associated accessories
in the United States; and
Therefore, in consideration of the following conditions set for the in
this Agreement, the parties agree to the following.
1. DEFINITIONS
"Customer" means an end user of a Product.
"Limited Warranty Statement" means Handspring's then-current warranty
from Handspring to Customers.
"Products" means the products in Handspring's then-current reseller
Product List, a current copy of which is attached as Exhibit A. A Product may
include both hardware and software components. Handspring may add to, delete
from, or otherwise modify the Products on the Product List at any time.
"Territory" means the United States of America.
2. PRODUCT TERMS
2.1 APPOINTMENT. Handspring hereby appoints Reseller, and Reseller
accepts such appointment, to act as a non-exclusive reseller of Products only to
Customers located in the Territory. Sale of Products to other resellers or
Reseller's affiliates is strictly prohibited. Reseller will only sell the
Products in face-to-face transactions from physical store outlets located in the
Territory, and will not market or sell the Products using any Internet site or
mail order catalog without specific written authorization by Handspring.
2.2 PRICES. The prices paid by Reseller to Handspring for Products shall
initially be as set forth in Exhibit A. Handspring shall have the right, at any
time, to change, alter, or amend Product prices upon written notice. Reseller is
eligible to receive price protection in accordance with the guidelines attached
as Exhibit C. Prices are exclusive of all taxes, insurance, and shipping and
handling charges, which are Reseller's sole responsibility.
3. ORDERING AND PAYMENT
3.1 ORDERS. Orders shall be in writing and be subject to acceptance by
Handspring. The terms and conditions of each order shall be as provided by this
Agreement, and the provisions of either party's form of purchase order,
acknowledgment or other business forms will not apply to any order
notwithstanding the other party's acknowledgment or acceptance of such form.
3.2 SHIPMENT. Shipment will be F.O.B. Handspring's specified warehouse
("Delivery Point"), at which time title (excluding any software components of
Products) and risk of loss will pass to Reseller. All freight, insurance and
other shipping expenses from Delivery Point, as well as any expenses related to
Reseller's special packing requests, will be borne by Reseller unless otherwise
agreed to in writing by Handspring.
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3.3 PAYMENT. Subject to compliance with Handspring's credit
requirements, payments on orders will be due and payable in full * days from the
invoice date. Reseller shall pay monthly service charges of 1% per month for any
past due amounts. Handspring may in its sole discretion change Reseller's credit
terms and/or require C.O.D. payment for any shipments.
4. RETURNS
4.1 DEFECTIVE PRODUCT RETURNS. Returns of defective Products will be
processed through return processing centers and consolidated for shipment weekly
or biweekly to Handspring by Reseller. Returns of defective Products will be
paid for by Handspring when Handspring authorized carriers are used. Return
shipment charges via unauthorized carriers and all customs or broker's fees are
the responsibility of Reseller. Handspring reserves the right to charge-back to
Reseller shipping charges incurred on those Products which were returned as
defective and no fault was found. Incomplete Product returns will be accepted
less the value of the missing components. Under no circumstances shall the total
defective returns of any specific Product model number exceed * % of total
purchases for that model number in the ninety (90) days prior to the return
request.
4.2 STOCK BALANCES. Upon written approval by Handspring, Reseller may
return current, undamaged Products which are unopened and in their original
packaging and original master packs to Handspring for full credit, less any
discounts, marketing considerations or credits previously received. Under no
circumstances shall the total stock balance return for a specific Product exceed
* % of total number of purchases for that Product model number in the ninety
(90) days prior to the return request. All freight charges for stock balanced
Product is paid by Reseller. Eligible Products returned by Reseller to
Handspring that are not approved in advance will be subject to a 15% handling
fee.
5. RESELLER'S OBLIGATIONS
5.1 MARKETING DEVELOPMENT. Reseller will aggressively market and
advertise the Products. So long as Reseller in compliance with this Agreement,
Reseller may participate in Handspring's Market Development Fund program ("MDF
Program"). A copy of the current MDF Program Guidelines is attached as Exhibit
B.
5.2 INVENTORY/ SALES INFORMATION. Reseller will be required to provide
sell through and inventory information for all inventory locations via an
electronic link such as EDI or other standard data transfer and exchange method.
The method must be agreed to in advance by Reseller and Handspring.
5.3 RESELLER COVENANTS. Reseller will: (i) conduct business in a manner
that reflects favorably at all times on Products and the good name, goodwill and
reputation of Handspring; (ii) avoid deceptive, misleading or unethical
practices that are or might be detrimental to Handspring or Handspring Products;
(iii) make no false or misleading representations with regard to Handspring or
Handspring Products; (iv) not publish or employ, or cooperate in the publication
or employment of, any misleading or deceptive advertising material with regard
to Handspring or Handspring Products; and (v) make no representations,
warranties or guarantees to customers or to the trade with respect to the
specifications, features or capabilities of Handspring Products that are
inconsistent with the literature distributed by Handspring.
5.4 USE OF TRADEMARKS AND PROPRIETARY NOTICES. During the term of this
Agreement, Reseller may use the trademarks, trade names, logos and designations
used by Handspring for Handspring Products solely in connection with Reseller's
advertisement and promotion of Handspring Products, in accordance with
Handspring's then-current trademark usage policies. Reseller shall not remove or
destroy any copyright notices, trademarks or other proprietary markings on the
Products, software, documentation or other materials related to the Products.
6. TERM AND TERMINATION
6.1 TERM. This Agreement shall commence on the Effective Date and
continue for twelve (12) months thereafter unless terminated earlier as provided
herein.
6.2 TERMINATION WITHOUT CAUSE. Reseller or Handspring may terminate this
Agreement without cause, at any time, by written notice to the other party not
less than thirty (30) days prior to the effective date of termination. All
unfilled orders pending at the time of the date of such notice of termination
shall be deemed canceled, and Handspring and Reseller hereby waive all claims
against the other in connection with the cancellation of such orders.
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and are filed separately with the Securities and Exchange Commission.
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6.3 TERMINATION FOR BREACH. Handspring may terminate this Agreement, for
cause, by written notice to Reseller not less than ten (10) days prior to the
effective date of such notice in the event that: (i) Reseller fails to pay past
due invoices within thirty (30) days after notice that invoices are past due;
(ii) Reseller fails to resolve and remove from Handspring unauthorized debits
after a remedy period outlined in section seven, subsection six: (iii) Reseller
violates any other material provision of this Agreement; or (iv) control of
Reseller is acquired, directly or indirectly, by a third party, or Reseller is
merged with a third party. Upon giving its notice of termination, Handspring may
alter its terms of sale, including credit terms, and take such other action as
may be consistent with the termination of Reseller as an authorized Handspring
Reseller.
6.4 TERMINATION FOR INSOLVENCY. At the option of Handspring or Reseller,
this Agreement shall terminate immediately if: (i) a receiver is appointed for
the other party or its property; (ii) the other party becomes insolvent or
unable to pay its debts as they mature or ceases to pay its debts as they mature
in the ordinary course of business, or makes an assignment for the benefit of
creditors; (iii) any proceedings are commenced by or for the other party under
any bankruptcy, insolvency or debtors' relief law; (iv) any proceedings are
commenced against the other party under any bankruptcy insolvency or debtor's
relief law, and such proceedings have not been vacated or set aside within sixty
(60) days from the date of commencement thereof; or (v) the other party
commences to dissolve under applicable corporate law statutes.
6.5 TERMINATION/EXPIRATION ACCOUNTING. All amounts payable by Reseller
to Handspring shall survive termination and become immediately due and payable.
In addition, Handspring shall have the right to repurchase unsold Products in
Reseller's inventory. Within ten (10) days following termination, Reseller shall
furnish Handspring with an inventory of unsold Products. Within ten (10) days
after receipt of such inventory, Handspring shall notify Reseller in writing
whether or not Handspring intends to repurchase from Reseller all or part of
such inventory at the original invoice price (less discounts, price protection
or other credits previously granted). Handspring shall pay all transportation
and other costs connected with shipping such Products to Handspring.
7. WARRANTY DISCLAIMER
7.1 CUSTOMER WARRANTY. Handspring provides a Limited Warranty Statement
to Customers. Reseller will make available to Customers a copy of the Limited
Warranty Statement and will not make any representations or statements
inconsistent with such Limited Warranty Statement.
7.2 EXPRESS DISCLAIMER. Handspring MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE Products, EXCEPT AS SET FORTH ABOVE. ALL IMPLIED
WARRANTIES AND CONDITIONS, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT, ARE
HEREBY DISCLAIMED.
8. LIMITATION OF LIABILITY
THE LIABILITY OF Handspring AND ITS SUPPLIERS ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE SUPPLY OF Products HEREUNDER, SHALL BE LIMITED TO THE
ACTUAL AMOUNTS PAID BY RESELLER TO Handspring FOR THE Products GIVING RISE TO
SUCH DAMAGES, AND SHALL IN NO EVENT INCLUDE LOSS OF PROFITS, COST OF PROCURING
SUBSTITUTE GOODS OR SERVICES, OR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES OF ANY KIND, EVEN IF Handspring OR ITS SUPPLIER IS AWARE OF THE
POSSIBILITY OF SUCH DAMAGES.
9. GENERAL
9.1 ASSIGNMENT. Neither party may assign, delegate, or transfer the
Agreement, or any of its rights or duties hereunder, without the prior written
consent of the other party. Any attempted assignment or delegation in violation
of this section shall be void. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties, their successors and permitted
assigns. Notwithstanding the foregoing, Handspring may assign its rights and
duties hereunder in connection with a merger, consolidation, spin-off, corporate
reorganization, acquisition, or sale of all or substantially all the assets of
Handspring.
9.2 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California (other than its conflicts of law principles), excluding the
United Nations Convention on Contracts for the International Sale of Goods. The
parties hereby consent to the exclusive jurisdiction of and venue in the federal
and/or state courts located in Santa Xxxxx County, California.
9.3 INDEPENDENT CONTRACTORS. In performing their respective duties under
this Agreement, each of the parties will be operating as an independent
contractor. Nothing contained herein will in any way constitute
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any association, partnership, or joint venture between the parties hereto, or be
construed to evidence the intention of the parties to establish any such
relationship. Neither party will have the power to bind the other party or incur
obligations on the other party's behalf without the other party's prior written
consent.
9.4 MODIFICATION AND WAIVER. No modification to this Agreement, nor any
waiver of any rights, will be effective unless assented to in writing by the
party to be charged, and the waiver of any breach or default shall not
constitute a waiver of any other right hereunder or any subsequent breach or
default.
9.5 NOTICES. Any required or permitted notices hereunder must be given
in writing at the address of each party set forth below, or to such other
address as either party may substitute by written notice to the other in the
manner contemplated herein, by one of the following methods: hand delivery;
registered, express, or certified mail, return receipt requested, postage
prepaid; nationally-recognized private express courier; or facsimile. Notices
will be deemed given on the date received.
9.6 SEVERABILITY. If for any reason any provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions of this Agreement shall remain in full
force and effect.
9.7 LIMITATION OF ACTION. Any legal action arising out of this Agreement
shall be barred unless commenced within one (1) year of the act or omission
giving rise to the action. Such limitation shall not apply to any actions
asserted against Reseller by Handspring arising from any delinquencies in
payment for Products.
9.8 ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto
constitute the entire and exclusive agreement between the parties hereto with
respect to the subject matter hereof and supersede any prior agreements between
the parties with respect to such subject matter.
In witness whereof, the parties have caused this Agreement to be
executed by their respective authorized representatives as of the Effective
Date.
Reseller Handspring
/s/ Xxxxxxx X. Xxxx, /s/ Xxxx Xxxxx, VP Sales,
Buyer II 3/2/00 N. America 3/13/00
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Name and Title Date Name and Title Date
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[HANDSPRING LOGO]
Price List DATED 1/24/00
Exhibit A
HANDHELD COMPUTERS
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UPC CODE MODEL PRODUCT DESCRIPTION COST MAP PRICE
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684736100014 1000E VISOR GRAPHITE 2 mb Visor handheld computer includes: USB * *
HotSync cradle, Mac adapter stylus, snap
cover Palm Desktop software (Windows and
Mac) Software link to Microsoft Outlook
(Windows only) 2 AAA batteries
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684736100014 1001E VISOR DELUXE GRAPHITE Graphite Case 8 mb handheld computer * *
includes: USB HotSync cradle, Mac adapter,
slip on leather case, snap cover, Stylus,
Palm Desktop software (Windows and Mac)
Software link to Microsoft Outlook (Windows
only) 2 AAA batteries
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684736100014 1002E VISOR DELUXE ICE Clear accented Case 8 mb handheld computer * *
includes: USB HotSync cradle, Mac adapter,
slip on leather case, snap cover, Stylus,
Palm Desktop software (Windows and Mac)
Software link to Microsoft Outlook (Windows
only) 2 AAA batteries
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684736100014 1003E VISOR DELUXE BLUE Blue accented Case 8 mb handheld computer * *
includes: USB HotSync cradle, Mac adapter,
slip on leather case, snap cover, Stylus,
Palm Desktop software (Windows and Mac)
Software link to Microsoft Outlook (Windows
only) 2 AAA batteries
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684736100014 1004E VISOR DELUXE GREEN Green accented Case 8 mb handheld computer * *
includes: USB HotSync cradle, Mac adapter,
slip on leather case, snap cover, Stylus,
Palm Desktop software (Windows and Mac)
Software link to Microsoft Outlook (Windows
only) 2 AAA batteries
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684736100014 1005E VISOR DELUXE ORANGE Orange accented Case8 mb handheld computer * *
includes: USB HotSync cradle, Mac adapter,
slip on leather case, snap cover, Stylus,
Palm Desktop software (Windows and Mac)
Software link to Microsoft Outlook (Windows
only) 2 AAA batteries
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and are filed separately with the Securities and Exchange Commission.
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SPRINGBOARD MODULES
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684736600019 6000E 33.6 MODEM MODULE Module modem. Adding just under half an inch * *
to the depth of your handheld. It's a
fully-featured Xxxxx-compatible 33.6Kbs
modem. Includes
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684736600118 6001E 8MB FLASH MODULE Expand your Visors memory with this 8MB * *
Flash Memory Module. Stores over 200 typical
Palm OS applications!
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684736600217 6002E BACKUP SPRINGBOARD
MODULE Back up your entire handheld with one touch. * *
Ideal for mobile users who don't have access
to their desktop for HotSyncing, or users
who don't HotSync with a PC.
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684736600316 6003E XXXXX XXXXX GOLF
SPRINGBOARD MODULE Electronic Arts'(TM)Xxxxx Xxxxx PGA * *
TOUR(R)Golf game. High resolution,
full-motion graphics, and a highly realistic
simulation of golf physics allow you to play
a round at TPC at Xxxxxxxxx(TM)TPC at
Sawgrass(TM) and Badlands Golf Club(TM)
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ACCESSORIES
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684736300308 3003W SERIAL HOTSYNC
CRADLE, ICE Enables users of non-USB equipped PCs and * *
Macs to HotSync their Visor(TM)to computers
through the serial port. Compatible with
Windows 95, Windows NT, and Mac OS 7.5.3 and
later.
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684736300407 3004W SERIAL HOTSYNC
CRADLE, GRAPHITE Enables users of non-USB equipped PCs and * *
Macs to HotSync their Visor(TM)to computers
through the serial port. Compatible with
Windows 95, Windows NT, and Mac OS 7.5.3 and
later.
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684736300506 3005W PREMIUM STYLUS 5 PACK Provides 5 premium metal stylus replacements * *
for your Visor(TM). Appropriately weighted
and pleasing to the touch, the Styli are a
classy and useful upgrade.
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684736301008 3010W SLIM LEATHER CASE Velcro tab closure, slots for cards, pocket * *
for money. Sewn-in attachment for Visor
device. Dimensions: 5" x 3 1/4"
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684736301206 3012W BI-FOLD LEATHER CASE 3 paper pads, pen and stylus holders. Slots * *
for cards and pocket for money. Sewn-in
attachment device for Visor device.
Dimensions: 6" x 4"
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and are filed separately with the Securities and Exchange Commission.
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[HANDSPRING LOGO]
Market Development Fund (MDF) Guidelines
Exhibit B
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- Reseller will submit plans for marketing the Products to
Handspring, which must approve such marketing plan prior to its
execution. These marketing activities and their respective costs
will be agreed to in advance and approved in writing by Reseller
and Handspring.
- Handspring will provide credits (so called Market Development
Funding ("MDF")) that can be used against payments due from
Reseller to Handspring for the purchase of Products. These
credits are not transferable.
- The Market Development Funding approved by Handspring is only
available to be used during the quarter that the allowance is
set aside for. Thus, advertising or marketing activities that
are approved for funding with Handspring MDF must be performed
during the quarter.
- Funds not used for prior approved activities within a quarter
from their allowance date will be automatically forfeited.
Expired funds will not be reinstated or rolled over to another
quarter.
- Handspring must be invoiced within 90 days of completion of the
activity. For example, allowances granted January 1 and executed
on March 1 must be invoiced by the end of June of the same year.
- Pre-billing and or debiting of Handspring for marketing
activities is not permitted.
- Handspring must be provided with a detailed rate card that
outlines costs, circulation and reach of each activity.
- Only advertisements, which adhere to the Handspring Minimum
Advertising Pricing Policy (a current copy of which is attached
to these Guidelines) are eligible for reimbursement.
- Approved activities must be fully completed by Reseller as
promised and verified by Handspring within the time limits
agreed to in advance. Reseller will refund the unexecuted
portion of the activity or provide HANDSPRNG with an equal value
in another area of promotion that is agreed to by Reseller and
Handspring. For example, if Handspring approves an end cap for
$10,000 in all Reseller stores, and Reseller only executes end
caps in 70% of stores, Reseller agrees to refund or provide
Handspring with $3,000 of value in another area of promotion
approved by Reseller and Handspring.
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[HANDSPRING LOGO]
Market Development Fund Guidelines
Minimum Advertised Price Program
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It is Handspring's policy not to pay for advertisements that are not
pre-approved and in compliance with Handspring Minimum Advertised Price ("MAP")
policy. Reseller maintains complete discretion as to its pricing practices.
However, to be eligible for reimbursement, Reseller's advertisements must comply
with the following guidelines:
- Pricing in Reseller advertisements must be equal to or higher
than the MAP reflected in current Price List. An advertisement
where no pricing is shown is considered to be in compliance.
- Deviations of up to one dollar ($1.00) above or below MAP are
allowable to accommodate various Reseller pricing practices.
- Specific product(s) or model(s) by SKU or model numbers must be
designated in ad.
- Two or more Handspring products advertised and sold together may
not be advertised at less than the combined MAP of the two
Products.
- Advertisements which show Handspring Product bundled with any
other products must be submitted to Handspring for approval.
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[HANDSPRING LOGO]
Price Protection Guidelines
Exhibit C
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As an authorized Reseller of Products, Reseller is eligible to receive price
protection In accordance with Handspring's price protection policy. In the event
of such a price reduction, Handspring will notify Reseller in advance and in
writing of price reduction and supply Reseller with a price protection claim
form and price protection program number to reference when claiming price
protection. This notification will identify the part and model number of the
Product to be price protected, the new price, the amount of the price protection
per unit and the effective date of the price reduction. Reseller will be
eligible to receive this amount per unit of said Product Reseller has in
inventory at the time of the price reduction if claimed and processed in
accordance with Handspring price protection guidelines.
- To be eligible for price protection, Reseller must provide
electronic Product Inventory and sell through reports to
Handspring on a weekly basis. These reports must show all
Product inventory owned by reseller including inventory in
transit to or from its warehouses, cross dock facilities,
distribution centers, Returned Merchandise Authorization (RMA)
centers, stores or other Product inventory locations. Inventory
in locations not visible through these reports is not eligible
for price protection by Handspring. Electronic reports must be
in the form of EDI or other generally accepted system for and
taken from the Reseller's inventory tacking or Enterprise
computing system. Manual inventory reports or other electronic
form outside of the guidelines will not be accepted unless
agreed to in advance, in writing by Handspring.
- Handspring and Reseller will validate and acknowledge Reseller
inventory reports with and credit Reseller for each unit
eligible for price protection the difference new and old
Reseller costs based on the inventory reports provided by
Reseller.
- Only product purchased directly from Handspring is eligible for
price protection. Demo units, close outs or special purchases
are excluded from this price protection policy unless otherwise
approved, in writing, by Handspring.
- Only Products reflected in current Handspring price lists is
eligible for price protection.
- Handspring reserves the right to validate Reseller inventory
claims by third party audit at any time and requires Reseller to
keep sufficient records for a period of 18 months.
- Once a credit has been signed for and acknowledged by both
parties, no additional claims will be allowed.
- Debits for price reductions will not be accepted by Handspring;
Handspring will only provide credits.
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