EXHIBIT 10.7
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement"), is entered into this 10th day of
October, 1999, by and between XXXXXX MICRO INC. ("Ingram"), a Delaware
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corporation, having its principal place of business at 0000 X. Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000, and MIXMAN TECHNOLOGIES INC. ("Vendor"), a
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California corporation, having its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000. The parties desire to and
hereby do enter into a distributor/supplier relationship, the governing terms
and mutual promises of which are set out in this Agreement.
1. Distribution Rights.
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1.1 Territory. Vendor grants to Ingram, including its affiliates for
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resale, and Ingram accepts, the non-exclusive right to distribute worldwide all
computer products produced and/or offered by Vendor ("Product") during the term
of this Agreement. Ingram shall have the right to purchase, sell and ship to any
reseller within the territory or to Xxxxxx'x affiliate, or at Vendor's option
Xxxxxx'x affiliate may purchase direct from Vendor.
1.2 Product. Vendor agrees to make available and to sell to Ingram such
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Product as Ingram shall order from Vendor at the prices and subject to the terms
set forth in this Agreement. Ingram shall not be required to purchase any
minimum amount or quantity of the Product.
2. Term and Termination.
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2.1 Term. The initial term of this Agreement is one (1) year. Thereafter
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the Agreement will automatically renew for successive one (1) year terms, unless
it is earlier terminated.
2.2 Termination.
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(a) Either party may terminate this Agreement, with or without cause, by
giving thirty (30) days written notice to the other party.
(b) Either party may immediately terminate this Agreement with written notice
if the other party:
(i) materially breaches any term of this Agreement and such breach
continues for thirty (30) business days after written notification thereof,
or
(ii) ceases to conduct business in the normal course, becomes insolvent,
makes a general assignment for the benefit of creditors, suffers or permits
the appointment of a receiver for its business or assets, or avails itself
of or becomes subject to any proceeding under any Bankruptcy Act or any
other federal or state statute relating to insolvency or the protection of
rights of creditors; or
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(iii) attempts to assign or otherwise transfer its rights hereunder
unless both have agreed in writing to such assignment or transfer.
3. Ingram Obligations.
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3.1 Product Availability. Ingram will list Product in its catalog(s) as
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appropriate and endeavor to make such Product available to customers.
3.2 Advertising. Ingram will advertise and/or promote Product in a
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commercially reasonable manner and will transmit as reasonably necessary Product
information and promotional materials to its customers.
3.3 Support. Ingram will make its facilities reasonably available for Vendor
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and will assist in Product training and support. Ingram will provide
reasonable, general Product technical assistance to its customers, and will
direct all other technical issues directly to Vendor.
3.4 Administration.
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(a) Upon request, Ingram will furnish Vendor with a valid tax exemption
certificate.
(b) Ingram will provide Vendor standard sales-out and inventory reports via
its electronic Bulletin Board System.
(c) Xxxxxx may handle its customers' Product returns by batching them for
return to Vendor at regular intervals.
3.5 Prior Agreement. Ingram agrees that concurrent with the execution of
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this Agreement that the Ingram and Vendor Start-Up Agreement dated September 24,
1997 is terminated and Ingram assumes all outstanding obligations, if any,
including but not limited to any payments due Vendor under the prior Start-Up
Agreement.
4. Vendor Obligations.
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4.1 Shopping/Export.
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(a) Vendor shall ship Product pursuant to Ingram purchase order(s) ("P.O.").
Product shall be shipped F.O.B. Xxxxxx'x designated warehouse with risk of loss
or damage to pass to Ingram upon delivery to the warehouse specified in Xxxxxx'x
P.O.
(b) Ingram requires concurrent with the execution of this Agreement Export
Administration Regulations product classification and supporting documentation:
Certificate of Origin (General Use and/or NAFTA), Export Commodity Control
Number's (ECCN's); General License and/or Individual Validated License
information and Schedule B/Harmonized Numbers. This applies when distribution
rights granted under Section 1.1 are outside the United States for the initial
Product/s and when additions or changes to these Products occurs.
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4.2 Invoicing. For each Product shipment to Ingram, Vendor shall issue to
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Ingram an invoice showing Xxxxxx'x order number, the Product part number,
description, price and any discount. At least monthly, Vendor shall provide
Ingram with a current statement of account, listing all invoices outstanding and
any payments made and credits given since the date of the previous statement.
4.3 Product Availability. Vendor agrees to maintain sufficient Product
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inventory to fill Xxxxxx'x orders. If a shortage of any Product exists, Vendor
agrees to allocate its available inventory of such Product to Ingram in
proportion to Xxxxxx'x percentage of all of Vendor's customer orders for such
Product during the previous sixty (60) days.
4.4 Product Marking. Vendor will clearly xxxx each unit of Product with the
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Product name and computer compatibility. Such packaging will also bear a
machine-readable bar code identifier scannable in standard Uniform Product Code
(UPC) format. The bar code must identify the Product as specified by the
Uniform Code Council (UCC). If the Vendor or Ingram customers' require serial
number tracking the serial number must be clearly marked and bar coded on the
outside of the individual selling unit. The bar code shall fully comply with
all conditions regarding standard product labeling set forth in Exhibit B in the
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then-current Ingram Guide to Bar Code: The Product Label. Vendor may be
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assessed a reasonable per unit charge for all Product not in conformance
herewith.
4.5 TechNotes. Vendor will within thirty (30) days of execution of this
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Agreement sign the CIS/Manufacture Product Information Library - TechNotes and
Content Distribution Agreements as shown in Exhibit C and provide the required
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product information in the designated template format.
4.6 Support. At no charge to Ingram, Vendor shall support Product and any
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reasonable Ingram efforts to sell Product. Vendor shall also provide to Ingram,
its employees, and its customers reasonable amounts of sales literature,
advertising materials, and training and support in Product sales.
4.7 New Product. Vendor shall endeavor to notify Ingram at least thirty
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(30) days before the date any new Product is introduced. Vendor shall make such
Product available for distribution by Ingram no later than the date it is first
offered for sale in the marketplace.
4.8 Insurance. Vendor shall carry insurance coverage for product
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liability/completed operations with minimum limits of five million dollars
($5,000,000). Within ten (10) days of the execution of this Agreement, Vendor
shall provide Ingram with a Certificate of Insurance. This Certificate of
Insurance must include: (i) a broad form endorsement naming Ingram as an
additional insured, and (ii) a mandatory thirty (30) day notice to Ingram of
insurance cancellation.
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4.9 Warranties/Certification.
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(a) General. Vendor represents and warrants that (i) it has good
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transferable title to the Products, (ii) the Product will perform in conformity
with specifications and documentation supplied by Vendor, (iii) the Product or
its use does not infringe any patents, copyrights, trademarks, trade secrets, or
any other intellectual property rights, (iv) that there are no suits or
proceedings pending or threatened which allege any infringement of such
proprietary rights, and (v) the Product sales to Ingram do not in any way
constitute violations of any law, ordinance, rule or regulation in the
distribution territory.
(b) Warranty. Vendor hereby represents and warrants that, any Product
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offered for distribution does not contain any obscene, defamatory or libelous
matter or violate any right of publicity or privacy.
(c) End-User Warranty. Vendor shall provide a warranty statement with
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Product for end user benefit. This warranty shall commence upon Product delivery
to end-user.
(d) Millennium Compliance Warranty. Vendor warrants and represents that the
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Product will properly (a) record, store, process, calculate or present calendar
dates falling on and after (and if applicable, spans of time including) January
1, 2000 as a result of the occurrence, or use of data consisting of, such dates
and (b) calculate any information dependent on or relating to dates on or after
January 1, 2000 in the same manner, and with the same functionality, data
integrity and performance, as such Product records, stores, processes,
calculates and presents calendar dates on or before December 31, 1999, or
information dependent on or relating to such dates.
(e) Class B Warranty. Vendor hereby represents and warrants that the
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Product has been or will be at the time of shipment certified as a Class B
computing device as required by the rules of the U.S.A. Federal Communications
Commission ("FCC Rules").
(f) EU Warranty. Vendor Rather warrants and represents for Products
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distributed to the European Union ("EU") that the Products will be accepted
under all EU directives, regulations and the EU country's legislation.
(g) Made in America Certification. Vendor by the execution of this
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Agreement certifies that it will not label any of its products as being "Made in
America," "Made in U.S.A.," or with similar wording, unless all components or
elements of such Product is in fact made in the United States of America. Vendor
further agrees to defend, indemnify and hold harmless from and against any and
all claims, demands, liabilities, penalties, damages, judgments or expenses
(including attorney's fees and court costs) arising out of or resulting in any
way from Product that does not conform to the Certification.
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4.10 Prior Agreement. Vendor agrees that concurrent with the execution of
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this Agreement that the Ingram and Vendor Start-Up Agreement dated September 24,
1997 is terminated and Vendor assumes all outstanding obligations, if any,
including but not limited to any payments due Ingram under the prior Start-Up
Agreement.
5. Pricing.
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5.1 Ingram Pricing. The suggested retail price and any Ingram discount for
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Product is set out in Exhibit D. Vendor may modify Exhibit D with a minimum of
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thirty (30) days advance written notice to Ingram. All Ingram orders for
Product will be billed at the price in effect when the order is placed. Ingram
shall have sole discretion as to selling price of Product to its customers.
5.2 Vendor Pricing. Vendor agrees that the prices and terms it offers to
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Ingram are now and will continue to be at least as low as those it offers to any
of its customers. If Vendor offers price discounts, promotional discounts or
other special prices to its other customers, Ingram shall also be entitled to
participate in and receive notice of the same no later than Vendor's other
customers.
5.3 International Pricing. If Vendor offers a better price outside the U.S.
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and Ingram has distribution rights in that territory then the same price shall
be offered to Ingram for Product sales into that territory.
5.4 Price Agreements. If Vendor reduces any Product price, or offers
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increased discounts to any customers, Vendor will promptly credit Ingram for the
difference between the original Product price and the reduced Product price for
Xxxxxx'x and its customers' Product inventory, including: (a) any Customer
Product in-transit from/to Ingram, (b) any unshipped orders, and (c) orders in-
transit to Ingram on the price reduction or increased discount offer date. In
the event that Vendor shall raise the list price of a Product, all orders for
such Product placed prior to the effective date of the price increase shall be
invoiced at the lower price. Vendor shall provide Ingram with thirty (30) days
advance notice of any price increases.
5.5 Payment Terms. Xxxxxx'x initial order payment terms shall be net ninety
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(90) days. Subsequent order payment terms shall be five percent (5%) fifteen
(15) days, net sixty (60) days. Payment shall be deemed made on the payment
postmark date.
5.6 Right to Withhold. Notwithstanding any other provision in this
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Agreement to the contrary, Ingram shall not be deemed in default if it withholds
any specific amount to Vendor because of a legitimate dispute between the
parties as to that specific amount pending the timely resolution of the disputed
amount.
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6. Marketing.
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6.1 Trademarks. Ingram may advertise and promote the Product and/or Vendor,
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and may thereby use Vendor's trademarks, service marks and trade names. Neither
party shall acquire any rights in the trademark service marks or trade names of
the other.
6.2 Programs.
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(a) Vendor shall provide Ingram a five percent (5%) quarterly rebate based
on gross sales to offset Xxxxxx'x handling and channel costs. The rebate will be
paid via a check within thirty (30) days after the quarter end and if no check
is received within that period Ingram shall deduct that amount from its next
check.
(b) Xxxxxx may offer marketing programs to Vendor including but not limited
to launch programs and reseller pass through opportunities. If Vendor elects to
participate, Vendor agrees to pay such funds as may be required for this
purpose.
(c) Vendor may be asked to prepay all marketing activities until a mutually
agreed upon sell through rate is achieved.
6.3 Support Product. Vendor shall consign a reasonable amount of
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demonstration Product to aid Ingram in its support and promotion of Product. All
such consigned Product will be returned to Vendor upon request
7. Returns.
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7.1 Stock Balancing. Notwithstanding anything herein to the contrary,
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Ingram may return throughout the term any Products which are in their original
packaging to Vendor for full credit of the Products' purchase price. In the
event that a Return Material Authorization (RMA) for the return of Product is
not issued within five (5) days of the request, Ingram shall have the right to
return any Product(s) to Vendor without an RMA, and Vendor shall be obligated to
accept such return for credit. Vendor will pay all freight charges for returned
Products.
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7.2 Post-Term/Termination. For one hundred eighty (180) days after the
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expiration or earlier termination of this Agreement, Ingram may return to Vendor
any Product for credit against outstanding invoices, or if there are no
outstanding invoices for a cash refund. Any credit or refund due Ingram for
returned Product shall be equal to the Product purchase price plus all freight
charges incurred by Ingram in returning the Product.
7.3 Product Discontinuation. Vendor shall give Ingram thirty (30) days'
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advance written notice of Product discontinuation. Ingram may return all such
Product to Vendor for full credit of Product purchase price plus all freight
charges incurred by Ingram in returning the Product.
7.4 Defective Product.
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(a) Ingram may return any Product to Vendor that Ingram or its customer
finds defective. Vendor shall immediately credit Ingram for the Product purchase
price, plus all freight charges incurred by Ingram in returning the defective
Product.
(b) If any Product is recalled by Vendor because of defects, revisions or
upgrades, Ingram will, at Vendor's request, provide reasonable assistance with
the recall. Vendor will pay Xxxxxx'x expenses in connection with such recall.
8. Indemnification.
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8.1 Product Indemnity. Vendor shall defend, indemnify, and hold harmless
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Ingram from and against any claims, demands, liabilities, or expenses (including
attorney's fees and costs) for any injury or damage, including, but not limited
to, any personal or bodily injury or property damage, arising out of or
resulting in any way from any defect in Products. This duty to indemnify Ingram
shall be in addition to the warranty obligations of Vendor.
8.2 General Indemnity. Each party shall indemnify, defend and hold the
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other harmless from and against any and all claims, actions, damages, demands,
liabilities, costs and expenses, including reasonable attorney's fees and
expenses, resulting from any act or omission of the acting party or its
employees under this Agreement, that causes or results in property damage,
personal injury or death.
8.3 Intellectual Property Rights Indemnity. Vendor shall defend, indemnify
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and hold Ingram, its resellers and their customers, harmless from and against
all damages and costs incurred by any of them arising from the infringement of
any patent, copyright, trademark, trade secret or other proprietary right by
reason of the manufacture, sale, marketing, or use of Product.
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8.4 Product Infringement. Upon threat of claim of infringement, Vendor may,
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at its expense and option (i) procure the right to continue using any part of
Product, (ii) replace the infringing Product with a non-infringing Product of
similar performance, or (iii) modify Product to make it non-infringing. If
Vendor does not so act within ninety (90) days after such claim, Ingram may
return Product to Vendor for a full credit against future purchases or for a
cash refund, at Xxxxxx'x option.
8.5 Multi-Media Indemnity. Vendor shall defend, indemnify and hold Ingram,
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its resellers and their customers, harmless from and against all damages and
costs incurred by any of them to the extent it is based upon a claim that the
Product either (i) violates a third party's right of publicity and/or right of
privacy, or (ii) contains any obscene, defamatory or libelous matter.
8.6 Millennium Compliance Indemnity. Vendor agrees to indemnify and hold
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Ingram and its shareholders, officers, directors, employees, agents, successors,
and assigns harmless from and against any and all claims, suits, actions,
liabilities, losses, costs, reasonable attorney's fees, expenses, judgments or
damages, whether ordinary, special or consequential, resulting from any third
party claim made or suit brought against Ingram or such persons, to the extent
such results from Vendor's breach of the warranty specified in Section 4.9(d).
8.7 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
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LOST PROFITS OF BUSINESS, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER
BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY OR OTHERWISE),
AND WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THIS LIMITATION IS IN NO WAY MEANT TO LIMIT VENDOR'S LIABILITY FOR PERSONAL
INJURY OR DEATH AS A RESULT OF A DEFECT IN ANY PRODUCT IN THOSE JURISDICTIONS
WHERE THE LAW DOES NOT ALLOW THIS LIMITATION.
9. Compliance with Federal Laws and Regulations.
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9.1 Executive Order 11246. Vendor agrees to include the Equal Employment
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Opportunity Clause by reference in every contract, agreement and purchase order
entered into with subcontractors or suppliers as required by 41 CFR 60-1.4.
9.2 Employer Information Report EEO-1/Written Affirmative Action. Vendor
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agrees that if the value of any contract or purchase order is fifty thousand
dollars ($50,000) or more and the Vendor has fifty (50) or more employees,
Vendor will (i) file an EEO-l report (Standard Form 100) and comply with and
file such other compliance reports as may be required under Executive Order
11246, as amended, and Rules and Regulations adopted thereunder and (ii) will
develop a written affirmative action compliance program for each of its
establishments as required by Title 41 CFR 60-1.40.
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9.3 Veterans Employment Clause. Vendor agrees to abide by and comply with
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the provisions of the Affirmative Action Clause, 41 CFR 60-250.4.
9.4 Employment of Handicapped Persons. Vendor agrees that it will abide by
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and comply with the provisions of the Affirmative Action Clause, 41 CFR 60-
741.4.
9.5 Small Business Concerns and Small Business Concerns Owned and Controlled
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by Socially and Economically Disadvantaged Individuals. Where a government
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contract is expected to exceed five hundred thousand dollars ($500,000), Vendor
agrees to comply with all requirements of P.L. 95-507 and regulations
promulgated thereunder. Vendor shall comply with instructions contained in
Exhibit E.
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9.6 Women-Owned Business Concerns. Vendor shall comply with instructions
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contained in Exhibit F. Where a government contract is expected to exceed five
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hundred thousand dollars ($500,000), Vendor agrees to comply with all
requirements of Executive Order 12138 and all regulations promulgated
thereunder.
10. Government Program.
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10.1 Partnership America. Vendor may, at its sole option, participate in
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Xxxxxx'x government reseller program in which case the provisions of Exhibit F,
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Partnership America, shall apply. A draft copy is provided solely for your
information and review.
11. General Provisions.
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11.1 Notices. Any notice which either party may desire to give the other
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party must be in writing and may be given by (i) personal delivery to an officer
of the party, (ii) by mailing the same by registered or certified mail, return
receipt requested, to the party to whom the party is directed at the address of
such party as set forth at the beginning of this Agreement, or such other
address as the parties may hereinafter designate, and (iii) by facsimile or
telex communication subsequently to be confirmed in writing pursuant to item (b)
herein.
11.2 Governing Law. This Agreement shall be construed and enforced in
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accordance with the laws of the State of California, except that body of law
concerning conflicts of law. The United Nations Convention on Contracts for the
International Sale of Goods shall not apply to this Agreement.
11.3 Cooperation. Each party agrees to execute and deliver such further
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documents and to cooperate as may be necessary to implement and give effect to
the provisions contained herein.
11.4 Force Majeure. Neither party shall be liable to the other for any
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delay or failure to perform which results from causes outside its reasonable
control.
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11.5 Attorneys Fees. In the event there is any dispute concerning the terms
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of this Agreement or the performance of any party hereto pursuant to the terms
of this Agreement, and any party hereto retains counsel for the purpose of
enforcing any of the provisions of this Agreement or asserting the terms of this
Agreement in defense of any suit filed against said party, each party shall be
solely responsible for its own costs and attorney's fees incurred in connection
with the dispute irrespective of whether or not a lawsuit is actually commenced
or prosecuted to conclusion.
11.6 Export Regulations. Ingram agrees by the purchase of Products to
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conform to, and abide by, the export laws and regulations of the United States,
including but not limited to, the Export Administration Act of 1979 as amended
and its implementing regulations. Ingram shall include a statement in it's
standard sales terms and conditions that any shipment of Product outside the
United States will require a valid export license. Ingram further agrees to
distribute Product in accordance with the territory as defined in Section 1.1.
Whenever a EU country is specified as Territory under Section 1.1, Territory
shall include all EU countries.
12. Agreement.
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12.1 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.2 Section Headings. Section headings in this Agreement are for
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convenience only, and shall not be used in consuming the Agreement.
12.3 Incorporation of all Exhibits. Each and every exhibit referred to
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hereinabove and attached hereto is hereby incorporated herein by reference as if
set forth herein in full.
12.4 Severability. A judicial determination that any provision of this
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Agreement is invalid in whole or in part shall not affect the enforceability of
those provisions found to be valid.
12.5 No Implied Waivers. If either party fails to require performance of
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any duty hereunder by the other party, such failure shall not affect its right
to require performance of that or any other duty thereafter. The waiver by
either party of a breach of any provision of this, Agreement shall not be a
waiver of the provision itself or a waiver of any breach thereafter, or a waiver
of any other provision herein.
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12.6 Binding Effect/Assignment. This Agreement shall be binding upon and
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shall inure to the benefit of the parties hereto, and their respective
representatives, successors and permitted assigns. This Agreement shall not be
assignable by Vendor, without the express written consent of Ingram, which
consent shall not be unreasonably withheld, including to a Person in which it
has merged or which has otherwise succeeded to all or substantially all of such
party's business and assets to which this Agreement pertains and which has
assumed in writing or by operation of law its obligations under this Agreement.
Any attempted assignment in violation of this provision will be void.
12.7 Survival. Sections 5.5 (Payment Terms), 5.6 (Right to Withhold), 7.2
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(Post-Term Termination) and 8 (Indemnification) shall survive the expiration or
earlier termination of this Agreement.
12.8 Entirety. This Agreement constitutes the entire agreement between the
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parties regarding its subject matter. This Agreement supersedes any and all
previous proposals, representations or statements, oral or written. Any
previous agreements between the parties pertaining to the subject matter of this
Agreement are expressly terminated. The terms and conditions of each party's
purchase orders, invoices, acknowledgments/confirmations or similar documents
shall not apply to any order under this Agreement, and any such terms and
conditions on any such document are objected to without need of further notice
or objection. Any modifications to this Agreement must be in writing and signed
by authorized representatives of both parties.
12.9 Authorized Representatives. Either party's authorized representative
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for execution of this Agreement or any amendment hereto shall be president, a
partner, or a duly authorized vice president of their respective party. The
parties executing this Agreement warrant that they have the requisite authority
to do so.
IN WITNESS WHEREOF, the parties hereunto have executed this Agreement.
INGRAM VENDOR
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XXXXXX MICRO INC. MIXMAN TECHNOLOGIES, INC.
0000 X. Xx. Xxxxxx Xxxxx 000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000 Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
By /S/ Xxxxx Grothan By /S/ Xxxx Xxxxxxx
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Name Xxxxx Grothan Name Xxxx Xxxxxxx
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Title GM, Software Title CFO
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Date 11/12/99 Date 10-10-99
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Address: Address:
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EXHIBITS
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A - Vendor Routing Guide (if applicable)
B - Guide to Bar Code: The Product Label
C - TechNotes
D - Product Price List
E - Small And Disadvantaged Business Certification
F - Partnership America
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