Exhibit 10.2
MICROSOFT CORPORATION
CHANNEL AGREEMENT
This Microsoft Corporation Channel Agreement ("Agreement") is entered into as
of the 1st day of July, 1998 (the "Effective Date") between MICROSOFT
CORPORATION ("MS"), having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ and SOFTWARE SPECTRUM, INC. ("COMPANY"), having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. DEFINITIONS
Except as set forth above, all capitalized terms included in this Agreement
are as defined in Schedule A attached hereto and incorporated herein by
reference.
2. ADDENDUM TO THE AGREEMENT
COMPANY'S rights and obligations with respect to the distribution of Product
under this Agreement are subject to the terms of any Addendum which the
parties have signed. Each Addendum is incorporated into and made a part of
this Agreement. In the event of inconsistency, the terms of any applicable
Addendum shall prevail over this Agreement. The terms of this Agreement,
including any Addenda, shall prevail over any provisions in purchase orders
or set-up forms.
3. TERM AND TERMINATION
3.1 TERM
This Agreement shall take effect on the Effective Date and shall continue
until June 30, 1999.
3.2 TERMINATION
Either MS or COMPANY may terminate this Agreement in its entirety and/or any
individual Addendum at any time, with or without cause, upon thirty (30)
calendar days prior written notice. If this Agreement is terminated without
cause, neither party shall be responsible to the other for any costs or
damages resulting from such termination.
3.3 RIGHTS UPON EXPIRATION OR TERMINATION
Any amounts which have accrued prior to termination or expiration shall
become immediately due and payable. Any Product acquired by COMPANY pursuant
to this Agreement as of the termination of this Agreement may be distributed
in accordance with the terms of this Agreement until fully liquidated. All
orders received from COMPANY but not shipped by MS prior to the effective
date of any expiration or termination, at MS' option, may be shipped or
canceled. COMPANY shall make a final report to MS within ninety (90) days of
termination of this Agreement.
4. COMPANY RIGHTS AND OBLIGATIONS
4.1 AUTHORIZED DISTRIBUTION
Product acquired under this Agreement shall be distributed within the
Territory only and only in accordance with the terms of this Agreement and
any applicable Addendum. COMPANY shall not, without the prior written consent
of MS, distribute Product to any Reseller or End User whom they have reason
to believe may re-distribute such Product outside of the Territory.
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4.2 NO OTHER PRODUCT WARRANTIES BY COMPANY
Neither COMPANY nor any of its employees or agents shall have any right to
make any other warranties or promises for the use of Product which are not
contained in the written warranty document accompanying the Product. COMPANY
may, however, give instructions for the use of the Product which are
contained on the Product label or container, or End User documentation
provided with the manual or MS product literature denoted by a MS part number
or authorized in writing by MS.
4.3 NO ALTERATIONS OF PRODUCT
COMPANY shall not alter the Product or Product packaging, and shall have no
authority to make copies of MS diskettes or documentation without the prior
written consent of MS. COMPANY shall distribute Product to its customers in
unopened packages.
4.4 USE OF TRADEMARKS
This Agreement does not constitute a trademark or service ▇▇▇▇ license.
COMPANY acknowledges and agrees that the Trademarks are the exclusive
property of MS or one of its affiliated companies and that COMPANY is not
entitled either by implication or otherwise to any title in the Trademarks.
COMPANY shall not use any Trademarks other than in accordance with this
Agreement (including but not limited to the guidelines set out in the TM Web
Site) or as otherwise permitted in writing from time to time by MS. With
respect to the distribution of Product, COMPANY shall use the appropriate
trademark symbol "-TM-" or "-Registered Trademark-" in a superscript and
clearly indicate MS' ownership of the Trademark(s) whenever the Product name
is first mentioned in any advertisement, brochure, or other manner in
connection with Products.
4.5 FINANCIAL STATEMENT
COMPANY will provide to MS' credit management, quarterly Financial Statements
within forty-five (45) days after the end of each calendar quarter. COMPANY
Financial Statements will be used by MS' credit department solely for the
purpose of establishing and reviewing COMPANY's credit.
4.6 TAXES
4.6(a) COMPANY TAXES
All amounts to be paid by COMPANY to MS herein are exclusive of any federal,
state, municipal or other governmental taxes, including income, franchise,
excise, sales, use, gross receipts, value added, goods and services, property
or similar tax, now or hereafter imposed on COMPANY. Such charges shall be
the responsibility of COMPANY and may not be passed on to MS, unless they are
owed solely as a result of entering into this Agreement and are required to
be collected from MS under applicable law.
4.6(b) BILLING AND COLLECTION
COMPANY will ▇▇▇▇, collect and remit sales, use, value added, and other
comparable taxes determined by COMPANY to be due with respect to the
distribution of the Product. MS is not liable for any taxes, including
without limitation, income taxes, withholding taxes, value added, franchise,
gross receipt, sales, use, property or similar taxes, duties, levies, fees,
excises or tariffs incurred in connection with or related to the distribution
of the Product. COMPANY takes full responsibility for all such taxes,
including penalties, interest and other additions thereon.
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4.6(c) WITHHELD TAXES
If, after a determination by foreign tax authorities, any taxes are required
to be withheld, on payments made by COMPANY to MS, COMPANY may deduct such
taxes from the amount owed MS and pay them to the appropriate taxing
authority, provided however, that COMPANY shall promptly secure and deliver
to MS an official receipt for any such taxes withheld or other documents
necessary to enable MS to claim a U.S. Foreign Tax Credit. COMPANY will make
certain that any taxes withheld are minimized to the extent possible under
applicable law.
COMPANY shall indemnify, defend and hold MS harmless from any claims or
liabilities arising from or related to any failure by COMPANY to comply with
Subsection 4.6.
4.7 ANTI-PIRACY
COMPANY shall take all commercially reasonable steps to prevent unauthorized
distribution, duplication or pirating of the Product.
4.8 COMPLIANCE WITH APPLICABLE LAWS
COMPANY shall ensure that its distribution of Product complies with any and
all applicable laws and regulations in the Territory.
5. MS OBLIGATIONS
5.1 ASSISTANCE WITH REPORTING
Upon COMPANY's written request, MS shall use reasonable efforts to assist
COMPANY in data reporting, and will work with COMPANY's Information
Management department to facilitate the data reporting process.
5.2 NO WARRANTIES FOR PRODUCT NOT MANUFACTURED BY MS
MS makes no warranties as to items distributed under a third party name,
copyright, trademark or tradename which may be included within the retail
package of a Product sold hereunder.
5.3 REPORTING/ELECTRONIC DATA INTERCHANGE
COMPANY shall provide weekly sales and inventory reporting in a timely and
accurate manner during the Term. Such sales reporting shall be submitted to
MS in accordance with the Electronic Data Interchange (EDI) Guidelines as
provided to COMPANY by MS, from time to time.
5.4 AUDITS
During the term of this Agreement and for a period of two (2) years following
its termination or expiration, MS or its designated representative, at its
own cost, may audit the applicable books, records and operations of COMPANY
as is reasonable to verify COMPANY's compliance with the terms of this
Agreement. COMPANY shall promptly correct any errors and omissions disclosed
by such audit. Any audit will be conducted during COMPANY's normal business
hours in such a manner as not to unreasonably interfere with COMPANY's normal
business activities. If any complete financial audit uncovers material
discrepancies COMPANY shall bear the out of pocket costs for the audit. For
purposes of this Section, "material discrepancies" shall mean a discrepancy
of five hundred thousand U.S. dollars (US$500,000) or more in monthly revenue
or sales reporting. Additionally, MS or its designated representative, at its
own cost, may audit any portion of COMPANY's books, records, and operations
as is reasonable to verify COMPANY's compliance with the specific terms,
policies and procedures of any addenda to this Agreement.
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6. COMPANY AND MS OBLIGATIONS
6.1 PRODUCT WARRANTY; LIMITATION OF LIABILITY
(a) MS warrants its software and hardware Product to End Users as
defined in the written limited warranty document accompanying each Product.
All replacement Product is delivered subject to the terms of the MS limited
Product warranty. THE ABOVE LIMITED WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, OR STATUTORY, INCLUDING IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
OBLIGATIONS OR LIABILITIES ON MS' PART.
(b) NEITHER MS NOR ANY THIRD PARTIES WHO HAVE BEEN INVOLVED IN THE
CREATION, PRODUCTION, OR DELIVERY TO THE COMPANY OF ANY MICROSOFT PRODUCT
WHICH IS THE SUBJECT OF THIS AGREEMENT SHALL BE LIABLE FOR ANY INDIRECT,
CONSEQUENTIAL, OR INCIDENTAL DAMAGES (INCLUDING DAMAGES FOR LOSS OF BUSINESS
PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE)
ARISING OUT OF THE USE OR INABILITY TO USE ANY PRODUCT EVEN IF MS HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(c) IN ANY CASE, THE LIABILITY OF MS (i) UNDER ANY PROVISION OF
THIS AGREEMENT; (ii) FOR ANY DAMAGES CAUSED BY A PROGRAM DEFECT OR FAILURE IN
ANY PRODUCT OR (iii) ARISING FROM A COURT OF PROPER JURISDICTION HOLDING ANY
OF THE ABOVE WARRANTIES OR DISCLAIMERS OF WARRANTIES INADEQUATE OR INVALID
SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY COMPANY TO MS UNDER THIS
AGREEMENT. MS' LIMITATION OF LIABILITY IS CUMULATIVE WITH ALL OF MS'
EXPENDITURES BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. THE
EXISTENCE OF CLAIMS OR SUITS AGAINST MORE THAN ONE PRODUCT DISTRIBUTED UNDER
THIS AGREEMENT WILL NOT ENLARGE OR EXTEND THE LIMIT. COMPANY RELEASES MS FROM
ALL OBLIGATIONS, LIABILITY, CLAIMS OR DEMANDS IN EXCESS OF THE LIMITATION.
6.2 SEMESTER PROGRAMS
(a) MARKETING FUNDS
Each Semester, MS may allow COMPANY to participate in programs which provide
the opportunity to earn marketing funds. COMPANY's participation in such
programs shall be governed by COMPANY's then current Microsoft Rebate and
Marketing Fund Offer Letter, and Microsoft's Marketing Fund Guidelines, as
such may be promulgated and modified by MS, in its sole discretion, from time
to time.
(b) REBATES
Each Semester, MS may allow COMPANY to participate in programs which provide
the opportunity to earn rebates as described in COMPANY's current Microsoft
Rebate and Marketing Fund Rebate Letter, and COMPANY's Rebate Program
Guidelines, as such may be promulgated and modified by MS, in its sole
discretion, from time to time.
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7. INDEMNIFICATION
7.1 BY MS
(a) If a third cause of action, claim, or demand is brought under
United States laws against COMPANY for an Infringement Claim, COMPANY shall
promptly notify MS in writing of the Infringement Claim, specify the nature
of such claim and the relief sought. COMPANY shall tender the defense of the
Infringement Claim to MS. Within thirty (30) calendar days of MS' receipt of
such notice, MS shall notify COMPANY in writing of MS' acceptance or
rejection of the defense of the Infringement Claim. If MS accepts the defense
of the Infringement Claim, then MS shall pay any settlement to which MS
consents or shall pay the amount of any adverse final judgment. As soon as MS
determines that it may reject defense of the Infringement Claim, MS and
COMPANY shall engage in good faith discussions with respect to MS' intention.
MS' acceptance or rejection of any Infringement Claim shall be based on MS'
discretion which shall be reasonable. As a clarification of the foregoing,
the parties understand and agree that MS will accept the defense of legitimate
and valid Infringement Claims. MS shall have sole control over the defense
and/or settlement of Infringement Claims. COMPANY shall provide reasonable
assistance of the same.
(b) In the event MS receives information concerning an
intellectual property infringement claim (including an Infringement Claim)
under United States laws and related to the Product(s) or the Marks, MS may
at its expense, without obligation to do so, either (i) procure for COMPANY
the right to continue to distribute the alleged infringing Product or ▇▇▇▇,
or (ii) replace or modify the Product or ▇▇▇▇ to make it non-infringing, and
in which case, COMPANY shall thereupon cease distribution of the alleged
infringing Product or ▇▇▇▇.
(c) MS shall have no liability for any intellectual property
infringement claim (including an Infringement Claim) based on COMPANY's (i)
distribution or use of any Product or ▇▇▇▇ after receipt of MS' notice that
COMPANY should cease distribution, or use of such Product or ▇▇▇▇ due to such
a claim; or (ii) combination of a Product with any other product, program or
data; or (iii) adaptation or modification of any Product.
(d) MS shall defend COMPANY, its subsidiaries, and affiliated
companies from and against any claims, losses, and damages relating to any
default, breach or alleged breach of MS' obligations, promises,
representations, warranties or agreements hereunder. MS' obligation to defend
COMPANY shall only apply provided that MS is immediately notified in writing
of any such claim. COMPANY shall provide reasonable assistance in the defense
of any claim. At COMPANY's sole option, and at MS's cost, COMPANY may
participate in the selection of counsel, defense and settlement of any claims
covered by this Section 7.2, or may tender sole control over the defense or
settlement of the claim to MS. If COMPANY chooses to participate in the
selection of counsel, defense and settlement of such claims, the parties
shall work together in good faith to reach decisions which are mutually
acceptable to both parties. COMPANY shall provide reasonable assistance in
the defense of any claim.
7.2 BY COMPANY
COMPANY shall defend MS, its subsidiaries, and affiliated companies from and
against any claims, losses, and damages relating to any default, breach or
alleged breach of COMPANY's obligations, promises, representations,
warranties or agreements hereunder. COMPANY's obligation to defend MS shall
only apply provided that COMPANY is immediately notified in writing of any
such claim. MS shall provide reasonable assistance in the defense of any
claim. At MS's sole option, and at COMPANY's cost, MS may participate in the
selection of counsel, defense and settlement of any claims covered by this
Section 7.2, or may tender sole control over the defense or settlement of the
claim to COMPANY. If MS chooses to participate in the selection of counsel,
defense and settlement of such claims, the parties shall work together in
good faith to reach decisions which are mutually acceptable to both parties.
MS shall provide reasonable assistance in the defense of any claim.
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8. INSURANCE
8.1 COMPANY
Throughout the Term and for thirty (30) days thereafter, COMPANY shall
maintain, at its sole expense, Commercial General Liability Insurance written
on an Occurrence Form, with policy limits of not less than three million
dollars (US$3,000,000) combined single limit each occurrence for personal
injury (including bodily injury and death) and property damage which may
arise from or in connection with the performance of COMPANY's obligations
hereunder or out of any negligent act or omission of COMPANY, its officers,
directors, agents, or employees. Upon MS' request, COMPANY shall provide
proof of its compliance with this section. Notwithstanding the foregoing,
COMPANY shall have the right to self-insure.
8.2 MS
Throughout the Term and for thirty (30) days thereafter, MS shall maintain,
at its sole expense, Commercial General Liability Insurance written on an
Occurrence Form, with policy limits of not less than three million dollars
(US$3,000,000) combined single limit each occurrence for personal injury
(including bodily injury and death) and property damage which may arise from
or in connection with the performance of MS's obligations hereunder or out of
any negligent act or omission of MS, its officers, directors, agents, or
employees. Upon COMPANY's request, MS shall provide proof of its compliance
with this section. Notwithstanding the foregoing, MS shall have the right to
self-insure.
9. EXPORT RESTRICTIONS
COMPANY agrees that COMPANY and, as applicable, its Resellers will not export
or re-export Product to any country, person, or entity subject to U.S. export
restrictions. COMPANY specifically agrees not to export or re-export Product
(i) to any country to which the U.S. embargoes or restricts the export of
goods or services, which as of March 31, 1998, includes, but is not
necessarily limited to, Cuba, Iran, Iraq, Libya, North Korea, Sudan and
Syria, or to any national of any such country who COMPANY knows intends to
transmit or transport the products back to such country; (ii) to any person
or entity that COMPANY or, as applicable, its Resellers know will utilize
Product in the design, development or production of nuclear, chemical or
biological weapons; or (iii) to any person or entity that has been prohibited
from participating in U.S. export transactions by any federal agency of the
U.S. government.
10. DELAY IN PERFORMANCE
If as a result of fire, casualty, act of God, riot, war, labor dispute,
government regulation, or decree of any court or any other event beyond the
control of COMPANY or MS, either of the parties shall be unable to perform
its obligations hereunder, such inability shall not constitute a breach of
this agreement, and such obligations shall be performed as soon as the cause
of the inability ceases or is removed. Strikes or other labor difficulties
which are not capable of being terminated on terms acceptable to the party
affected shall not be considered circumstances within the control of such
party. In the event of Product shortages, MS shall have the right to allocate
available supplies of the Product in its sole discretion.
11. NO WAIVER
None of the provisions of this Agreement shall be deemed to have been waived
by any act or acquiescence on the part of MS, COMPANY or their respective
agents or employees, but may be waived only by an instrument in writing
signed by an authorized officer of the waiving party. No waiver of any
provision of this Agreement shall constitute a waiver of any other provision
or of the same provision on another occasion.
12. NO PARTNERSHIP OR AGENCY
Nothing in this Agreement shall be deemed to create or constitute a
partnership, joint venture, franchise, agency, or contract of employment
between MS and COMPANY.
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13. ATTORNEY'S FEES; GOVERNING LAW
In the event an action is commenced to enforce a party's rights under this
Agreement, the prevailing parry in such action shall be entitled to recover
its costs and attorneys' fees. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Washington. COMPANY
consents to jurisdiction and venue in King County, Washington.
14. ENTIRE AGREEMENT
This Agreement and all attached Amendments and Addenda constitute the entire
agreement between MS and COMPANY, and supersedes and terminates any and all
prior agreements or contracts, written or oral, entered into between the
parties relating to the subject matter hereof. Any representations, promises,
or conditions in connection therewith not in writing signed by both parties
shall not be binding upon either party. This Agreement shall control any
provisions in purchase orders which are inconsistent with this Agreement.
15. U.S. GOVERNMENT RIGHTS
All Products provided to the U.S. Government pursuant to solicitations
issued on or after December 1, 1995, are provided with commercial license
rights only. All Products provided to the U.S. Government pursuant to
solicitations issued prior to December 1, 1995 are provided with RESTRICTED
RIGHTS as provided for in FAR, 48 C.F.R. 52.227-14 (June 1987) or FAR, 48 CFR
252.227-7013 (OCT 1988), as applicable. COMPANY shall be responsible for
ensuring that all Products are marked with the "Restrictive Rights" legend.
Manufacturer is Microsoft Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
16. CONFIDENTIALITY
COMPANY expressly undertakes to retain in confidence the terms and conditions
of this Agreement and any applicable Addenda and all information and know-how
transmitted to it by MS and make no use of such information and know-how
except under the terms and during the existence of this Agreement. COMPANY
shall guarantee and ensure its employees' compliance with this paragraph.
COMPANY's obligations under this paragraph shall survive any termination of
this Agreement and shall extend to the earlier of such time as the
information is public domain or five (5) years following the termination of
this Agreement. This Section shall not prohibit the parties from disclosing
such information as is specifically required by any Federal or state
authorities. Notwithstanding the foregoing, COMPANY may disclose confidential
information in accordance with any judicial or other governmental order or
request, provided that COMPANY shall immediately notify MS in writing upon
its receipt of such order or request and shall assist MS as is reasonable in
seeking any protective order or its equivalent or in limiting the scope of
disclosure of any Confidential Information.
17. NO ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that COMPANY
may not assign its rights or obligations under this Agreement in any way
without the prior written consent of MS. MS may assign this Agreement or any
portions thereof, to any MS related company.
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18. NOTICES
All notices required or contemplated by this Agreement shall be in writing,
delivered by U.S. certified main (return receipt requested), or via overnight
courier (e.g., Federal Express, or DHL), and addressed as follows:
If to MS: Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: Channel Policies
Write cc to: Law and Corporate Affairs
If to COMPANY:
Software Spectrum, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Such notices shall be deemed given three (3) business days after being
deposited in the United States mail or one business day after being delivered
with an overnight carrier.
19. SURVIVAL
Sections 3.3, 4.6, 5.4, 6.1, 7, 8.1, 8.2, 14, 15 and 18 shall survive any
termination of this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement on the dates
indicated below. This Agreement is not binding until executed by MS.
MICROSOFT CORPORATION ("MS") SOFTWARE, SPECTRUM INC.
("COMPANY")
By: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------- -------------------------------------
Name (please print) Name (please print)
General Manager, U.S. Headquarter Sales Vice President
--------------------------------------- -------------------------------------
Title Title
July 1, 1998
--------------------------------------- -------------------------------------
Date Date
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SCHEDULE A
DEFINED TERMS
"DISTRIBUTOR" shall mean any business entity which purchases MS Product
directly from MS, and is authorized by MS to distribute said Product to
Resellers.
"ELECTRONIC DATA INTERCHANGE" or "EDI" shall mean the ANSI-ASCII X.12
standard, adopted by CompTTA by which COMPANY shall subject sales reporting to
MS.
"END USER" shall mean the ultimate consumer of Product.
"FINANCIAL STATEMENT" shall mean a Balance Sheet as of the last day of
the calendar quarter, and an Income Statement and Statement of Cash Flows for
the quarter and year-to-date, prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). Any deviation from GAAP in the quarterly
statements shall be clearly noted. These statements must be signed by an
officer of COMPANY as being representative of the books and accounts of
COMPANY.
"INFRINGEMENT CLAIM" shall mean any allegation against the COMPANY that
the Products or Marks infringes any copyright, patent, or trademark of a
third party, or misappropriates a third party trade secret.
"MARKS" shall mean the Trademarks (defined below) or any and all
copyrights MS may own.
"PRODUCT" shall mean any MS Stock Keeping Unit ("SKU") listed on
COMPANY's then current Price List.
"RESELLER" shall mean any software retailer which purchases Product from
MS or a MS authorized Distributor.
"SEMESTER" shall mean a six month period. During the Term there shall be
two (2) Semesters, one running from July 1 through December 31, and the
second Semester running from January 1 through June 30.
"TERM" shall mean the term of this Agreement which is specified in
Section 3.1 of this Agreement.
"TERRITORY" shall mean the geographic boundaries of the United States of
America, excluding all United States territories, possessions, or
protectorates. The parties agree that if this Agreement includes a Large
Account Reseller Addendum, then for that Addendum only, Territory shall mean
both Canada and the United States, excluding all United States territories,
possessions, or protectorates.
"TM WEB SITE" shall mean the web site located at
▇▇▇▇://▇▇▇ ▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇.
"TRADEMARKS" shall mean the trademark and trade name "Microsoft", and
all trademarks and tradenames derived therefrom, and the trademarks used in
association with all Products or which are set out at the TM Web site, as may
be amended from time to time by MS.
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LARGE ACCOUNT RESELLER
ADDENDUM TO THE MICROSOFT
CHANNEL AGREEMENT
This Addendum ("ADDENDUM") entered into this 1st day of July, 1998
supplements that certain Channel Agreement ("Agreement") between MICROSOFT
CORPORATION ("MS") having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and SOFTWARE SPECTRUM, INC. ("COMPANY") having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The
Agreement is hereby supplemented as follows:
1. PURPOSE
The purpose of this Addendum is to set forth the framework by which MS
appoints COMPANY as a non-exclusive Large Account Reseller in the Territory
with the rights to acquire Microsoft Select Software Products from MS and to
distribute such Select Software Products and their associated license rights
to Select Customers which have designated COMPANY in their Enrollment Form as
their Large Account Reseller. For purposes of this Addendum only, the parties
agree that "Territory" shall mean Canada and the United States, excluding all
United States territories, possessions, or protectorates.
2. DEFINITIONS
For purposes of this Addendum, capitalized terms are as defined in Schedule A
attached hereto and incorporated herein by reference. Any capitalized terms
not otherwise defined herein, shall have the same meaning as set forth in the
Agreement.
3. COMPANY RIGHTS AND OBLIGATIONS
3.1 DISTRIBUTION OF SELECT SOFTWARE PRODUCTS
COMPANY may only distribute Select Software Products to Select Customers
located in the Territory, and in accordance with Subsection 3.1(a) below, at
the direction of any Select Customer, outside of the Territory. However,
should a Select Customer desire to initiate an Enrollment Form in a country
outside of the Territory, the Select Customer is required by the terms of
the Microsoft Select Program to locate a Large Account Reseller in the
desired country and acquire Select Software Products from that Large Account
Reseller.
3.1(a): If the Select Customer is a business entity established
under the laws of the United States or Canada and existing in the Territory,
it may designate the COMPANY on an Enrollment Form as its Large Account
Reseller for itself and other related companies which may exist outside of
the Territory. COMPANY shall distribute Select Software Products outside the
Territory in accordance with the terms and conditions of this Agreement and
in accordance with applicable laws.
3.1(b): If the Select Customer is a business entity established
under the laws of a foreign country and existing outside of the Territory,
then it must designate a Large Account Reseller in the same country on an
Enrollment Form. In this case, COMPANY is not authorized to distribute Select
Software Products for such Select Customer. Select Customers are entitled to
distribute the rights associated with their Select Software Products outside
of the Territory if they so elect, in accordance with the Master Agreement
and all applicable laws. However, in the event a Select Customer wants to
initiate an Enrollment Form in a country outside of the Territory, the Select
Customer is required by the terms of the Microsoft Select Program to locate a
Large Account Reseller in the desired country and acquire Select Software
Products from that Large Account Reseller.
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3.2 DOCUMENTATION
COMPANY shall be authorized to purchase Documentation Components from MS
Worldwide Fulfillment for resale to MS volume license customers only. A
validation process must be implemented by COMPANY to ensure that only MS
volume license customers receive Documentation Components. This validation
process must include, at a minimum, verification of the Select or Open
Licensee Authorization number, as applicable, of the customer. The validation
process must be documented in writing, which documentation will be made
available to Microsoft upon request. Price protection is not available for
Documentation Components purchased from MS Worldwide Fulfillment.
COMPANY may request authorization to return Documentation Components
purchased from MS Worldwide Fulfillment within sixty (60) calendar days from
the date of invoice. Upon request, MS will provide COMPANY with a Return
Authorization Form which COMPANY must complete and return to MS. MS will
issue a return authorization number for Documentation Components meeting
return criteria. Documentation Components must be returned within thirty (30)
calendar days of the issuance of the return authorization number. Freight
costs shall be paid by COMPANY. MS shall issue COMPANY a purchase credit in
the amount of the authorized return.
3.3 DISTRIBUTION RESTRICTIONS
Nothing in this Addendum authorizes the Large Account Reseller to use Select
Software Products internally or to distribute or otherwise transfer Select
Software Products to any Large Account Reseller Affiliate without the prior
written consent of MS.
3.5 COMPANY ACCEPTANCE OF ENROLLMENT AGREEMENTS
In order to remain authorized to purchase Select Software Products and
Documentation Components from MS for resale to Select Customers, an authorized
representative of COMPANY must review and acknowledge the Select Customer's
Enrollment Agreement. COMPANY's signature on the Enrollment Agreement shall
constitute COMPANY's agreement to pay MS as set forth in Section 3.6 below
for all copies of Select Software Products made by the Select Customer
pursuant to the Select License Agreement.
3.5 COMPANY SELECT PRICE SCHEDULE
COMPANY's prices are set forth on the COMPANY Select Price Schedule, a sample
of which is attached hereto and incorporate herein by reference as Schedule
B. MS may modify the COMPANY Select Price Schedule at any time by providing
thirty (30) days written notice to COMPANY.
3.6 COMPANY'S REPORTING AND/OR ORDERING AND PAYMENT TO MS
(a) MICROSOFT SELECT 2.X ENROLLMENT AGREEMENT REPORTING
For each executed Microsoft Select version 2.x Enrollment Agreement, the
Select Customer is obligated by the terms of the Microsoft Select Program to
deliver to MS within fifteen (15) days of the end of each calendar quarter, a
written verified report for each Select Software Product acquired from
COMPANY pursuant to the terms of this Agreement. Following receipt of a
report from a given Select Customer, MS shall invoice COMPANY and COMPANY
shall be obligated to pay MS the fees set forth on Schedule B for each unit
reported by the Select Customer. If the Select Customer delivers written
verified reports at intervals shorter than the quarterly requirement, MS
shall invoice COMPANY immediately following receipt of such report, and
COMPANY shall be obligated to pay MS pursuant to the terms of this Section
3.6. In the event COMPANY wants to receive copies of its Select Customers'
quarterly reports, COMPANY shall negotiate with its Select Customers for the
right to receive such copies.
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(b) MICROSOFT SELECT CONSUMPTION REPORT
For each of its executed Microsoft Select version 3.0 and 4.0 Enrollment
Agreements, COMPANY shall deliver to MS via Electronic Data Interchange
("EDI") no later than the fifteenth (15th) day of each calendar month, a
purchase order for each Select Software Product ordered and acquired in the
previous month from COMPANY by the Select Customer pursuant to the terms of
this Addendum. Following receipt of such purchase order, MS shall invoice
COMPANY and COMPANY shall be obligated to pay MS according to the Schedule B
prices, along with any applicable quarterly Maintenance fees. If the Select
Customer elects to pre-pay any or all of its Maintenance commitment. COMPANY
shall immediately report such pre-payment to MS, MS shall invoice COMPANY
immediately following receipt of such report, and COMPANY shall be obligated
to pay MS pursuant to the terms of this Section 3.6.
(c) PAYMENT TERMS
All amounts are due and owing net thirty (30) days of date of invoice. All
payments not received by MS from COMPANY within the required time frame may
be assessed a finance charge of two percent (2%) of the invoice amount per
month or the legal maximum, which ever is less. COMPANY shall be obligated to
pay MS any and all amounts due regardless of whether COMPANY has received
payment from the Select Customer. COMPANY shall use its best efforts to
collect any and all amounts due from any Select Customer. Notwithstanding the
foregoing, if any Enterprise Customer defaults on its payment obligation to
COMPANY for more than ninety (90) calendar days, COMPANY will provide MS with
written notice identifying the Enterprise Customer and the amount of the
delinquency. COMPANY shall deliver such notice to MS at the address set forth
in Section 17 of the Channel Agreement. Provided that the Enterprise Customer
is unable or willing to pay the amounts due, then COMPANY shall be released
from any payment obligation arising from the delinquent Enterprise Customer's
account.
All payments shall be in the form of bank wire transfer or electronic funds
transfer through an Automated Clearinghouse ("ACH") with electronic
remittance detail attached.
Payments shall be remitted to:
Microsoft North American Collections #844505
Account #3750771767
ABA: #11100001-2
NationsBank of Texas, N.A.
All payments must be sent to NationsBank at the address indicated above using
the 820 Remittance EDI transaction set or other form of ACH payment with
electronic remittance detail attached. Remittance detail must be received by
NationsBank by 10:00 AM Central time/8:00 AM Pacific time to ensure same-day
credit to COMPANY's account. COMPANY may not withhold payment or take
deductions prior to MS issuing credit for rebates, price adjustments, billing
errors or any other credit memo issued by MS.
(d) REPORT REVISIONS
COMPANY shall use its best efforts to process all adjustments of Microsoft
Select Software Products within ninety (90) days from the original invoice
date. All revised reports must provide detailed back-up as required by MS. MS
reserves the right to review the circumstance of all claims submitted more
than one hundred eighty (180) days from the original invoice date, and may
determine whether such revised report is eligible for credit.
3
(e) EDI TRANSACTION SETS
COMPANY shall utilize EDI transaction sets Purchase Order Acknowledgment
(855), Advance Ship Notice (856), Price Catalog (832), Purchase Order
Transmission (850), and - Invoices (810). MS may elect, during the term of
this Addendum, to require COMPANY to implement Backorder Reports using EDI
transaction set 870 and/or other EDI transaction sets or forms of electronic
commerce. Should MS require such transaction sets, MS shall provide COMPANY
with no less than one hundred twenty (120) days prior written notice. All
required EDI transaction shall be submitted in accordance with the EDI
Guidelines as provided to COMPANY by MS.
3.7 SALES TAXES
COMPANY shall either provide MS with a bona fide resale certificate for all
Select Software Products delivered to COMPANY by MS pursuant to the terms of
this Addendum, or shall pay to MS all applicable sales, use or other excise
taxes due on such Select Software Products. COMPANY shall indemnify, defend
and hold harmless MS from any tax liabilities arising from or related to any
failure by COMPANY to comply with this Section 3.7 to the Addendum.
3.8 AGREEMENTS BETWEEN COMPANY AND SELECT CUSTOMERS
With the exception of the terms contained in this Addendum and the terms
relating to the exercise of the intellectual property rights set forth in the
applicable Select Software Products, the applicable License Agreement for
such Select Software Products, Master Agreement and Enrollment Form, COMPANY
shall have complete discretion to establish with each Select Customer the
pricing and all other terms and conditions regarding COMPANY's provision of
Select Software Products and their associated license rights to COMPANY's
Select Customers. The negotiation of these terms between COMPANY and its
Select Customers shall not be subject to approval or review by MS in any way.
3.9 ROLE OF THE SELECT PROGRAM ADMINISTRATOR
COMPANY agrees to appoint a representative to serve as COMPANY's Select
Program Administrator. COMPANY agrees to promptly make that individual, as
well as COMPANY's other sales employees, available for training on the
Microsoft Select Program and on the licensing policies related to such
products at such times and places as MS reasonably requests. The individual
appointed by COMPANY as its Select Program Administrator shall be an
individual generally knowledgeable of MS products and of Microsoft's Select
Program. The Select Program Administrator shall be responsible for
administering all of COMPANY's Select Customer ▇▇▇▇▇▇▇▇ and transactions,
contract compliance, for general administration of COMPANY's Select
Customers, disseminating all program information as necessary within
COMPANY's organization, and for working with the Microsoft Select Account
Manager (or local MS Contact) in regard to any problems relevant to a given
Select Customer. COMPANY's Select Program Administrator shall be:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Software Spectrum, Inc.
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------
(▇▇▇) ▇▇▇-▇▇▇▇
-------------------------
COMPANY shall provide MS with at least ten (10) days advance written notice
of any change in the individual serving as its Select Program Administrator.
3.10 ENROLLMENT OF NEW SELECT CUSTOMERS
COMPANY'S solicitation of new Select customers shall be on such terms and
conditions as MS specifies from time to time. MS reserves the right to accept
or reject in its sole discretion any proposed customer.
4
3.11 COMPANY'S REPRESENTATIONS AND WARRANTIES
COMPANY hereby represents and warrants that COMPANY shall:
(a) Have email availability, Internet access, and an active VLOR
account as is necessary to perform COMPANY's obligations pursuant to this
Addendum;
(b) Use its best efforts to service and support its Select
Customers and will promptly inform the appropriate Microsoft Select contact
of any difficulties it encounters in servicing its Select Customers;
(c) Not alter in any way or form the Select Software Products or
their packaging;
(d) Deliver the Select Software Products only to the Select
Customer specified on the outside of the Select Software Product packaging
and will deliver CD-ROMs and program materials and information only to the
Select Customer named on each such CD-ROM or materials; and
(e) Promptly inform MS of any known or suspected violations by a
Select Customer of the items and conditions of the Master Agreement,
Enrollment Agreement, enrollment Form, or its Select Software Products and/or
the applicable License Agreement.
3.12 CONFIDENTIALITY
COMPANY expressly undertakes to retain in confidence the terms and conditions
of this Addendum, and the terms and conditions of all executed Select Master
Agreements and Select Enrollment Forms which are made available to COMPANY.
Should COMPANY disclose the terms and conditions of any executed Select
Master Agreement or Select Enrollment Form, this Addendum shall immediately
terminate. COMPANY shall guarantee and ensure its employees' compliance with
this paragraph. COMPANY's obligations under this paragraph shall survive any
termination of this Agreement and shall extend to the earlier of such time as
the information is in the public domain or five (5) years following the
termination of this Agreement. This section shall not prohibit COMPANY from
disclosing such information as is specifically required by any Federal or
state authorities. Notwithstanding the foregoing, COMPANY may disclose
confidential information in accordance with any judicial or other
governmental order or request, provided that COMPANY shall immediately notify
MS in writing upon its receipt of such order or request and shall assist MS
as is reasonable in seeking any protective order or its equivalent or in
limiting the scope of disclosure of any confidential information.
3.13 COMPANY TERMINATION OF ENROLLMENT AGREEMENT/FORM
At anytime during the Term, COMPANY shall be able to terminate its rights and
obligations related to any Enrollment Agreement/Form currently administered
by COMPANY. In order for such termination to be effective, COMPANY must notify
MS in writing of its desire to terminate its rights and obligations. Such
notification shall include the Select Customer's name and current contact
information, Select Agreement Number, and date of execution. All notification
shall be sent via a courier service able to track package delivery. COMPANY's
rights and obligations shall terminate thirty (30) days upon receipt of the
required notice.
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4. COMPANY AND MS OBLIGATIONS
4.1 DELIVERY OF SELECT SOFTWARE PRODUCTS AND SELECT CD-ROMS.
Within fifteen(15) days of MS's approval of a given Enrollment Agreement or
Form, MS agrees to deliver to COMPANY the Select Software Products identified
on such Enrollment. Each Select Software Product delivered to COMPANY will be
a custom package specific to the named Select Customer and will set forth the
Customer's Select Agreement Number and any special conditions relevant to the
named Select Customer. Select Software Products are provided in order that
COMPANY may provide the Select Software Products and their associated license
rights to the named Select Customer on such pricing and payment terms and
conditions as COMPANY and the Select Customer agree. COMPANY agrees to pay MS
for Select Software Products as set forth in Section 3.6 above. From time to
time during the term of this Addendum, MS will provide COMPANY with CD-ROMs
containing upgraded copies of the Select Software Products covered by a
Select Customer's Select Agreement. COMPANY agrees to immediately deliver all
CD-ROMs and any additional MS supplied program information and materials to
the named Select Customer.
4.2 RESERVATION OF RIGHTS
MS expressly reserves the right at any time during the Term to terminate any
Select Customer's status as a Select Customer in the event the Select
Customer fails to comply with the terms of either the Master Agreement, the
Enrollment Form or the applicable License Agreement. MS agrees to promptly
notify COMPANY of the termination of any Select Customer to whom COMPANY has
distributed Select Software Products. Following such a notice COMPANY shall
immediately cease the distribution of any Select Software products, licenses,
CD-ROMs or any additional program information and materials to the terminated
Select Customer. Termination shall not, however, affect the Select Customer's
obligation to file the next due order/report and MS's right to invoice
COMPANY in regard to such order. If MS terminates a given Select Customer,
COMPANY shall not have any claim against MS or the Select Customer for
damages or lost profits resulting from such termination. COMPANY shall,
however, be entitled to invoice the Select Customer for copies of Select
Software Products reproduced by the Select Customer as set forth in the
Select Customer's final order, such invoice to be on the terms and conditions
previously agreed to between COMPANY and the Select Customer.
4.3 OBLIGATIONS ON TERMINATION
In the event this Addendum is terminated for cause, MS shall be entitled to
direct all of COMPANY's Select Customers to report/order and pay to MS or the
Select Customer's newly designated Select Large Account Reseller any and all
payments due after termination. In such an event, COMPANY shall not under any
circumstances be entitled to any portion of, or any compensation for, the
Select Customers' next orders and payments or any future orders and payments.
Termination or expiration shall not affect COMPANY's ability to perform its
obligations pursuant to this Addendum as it relates to any of COMPANY's
existing Enrollment Agreements. However, COMPANY shall have no right to enter
into additional Enrollment Agreements, or to present itself as a Large
Account Reseller.
4.4 ESSENTIAL ELEMENT
Both COMPANY and MS acknowledge that this Addendum is essential to any
agreement it enters into with a Select Customer. Except as is specifically
provided in Section 4.3 related to COMPANY's right to collect any outstanding
payment following termination of this Addendum, COMPANY's rights to acquire
and/or distribute Select Software Products, Select CD-ROM's and/or any
additional program information and materials, and to collect payment from its
Select Customers are conditional upon this Addendum being in full force and
effect. COMPANY acknowledges further that, if and when it is the subject of a
bankruptcy filing (under any Chapter of 11 United States Code Section 101 ET
SEQ. including any future amendments), then assumption of any contract with a
Select Customer is conditional upon the assumption of this Addendum.
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5. AGREEMENT AND ADDENDUM TERMS
If any terms and conditions in this Addendum conflict with the term and
conditions in the Agreement, with respect to COMPANY's authorization as a
Large Account Reseller only, the terms and conditions of this Addendum shall
control.
6. SURVIVAL
Sections 3.6, 3.7, 3.12, 4.3, and 6 shall survive any termination of this
Addendum.
IN WITNESS WHEREOF, the parties have signed this Addendum on the date
indicated below. This Addendum is hereby made part of the Agreement. All
terms and conditions of the Agreement not supplemented herein shall remain in
full force and effect. This Addendum is not binding until executed by MS.
MICROSOFT CORPORATION SOFTWARE-SPECTRUM, INC.
("MS") ("COMPANY")
By: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- -----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------- --------------------------------------
Name (please print) Name (please print)
General Manager, US Headquarter Sales Vice President
-------------------------------------- --------------------------------------
Title Title
-------------------------------------- --------------------------------------
Date Date
7
SCHEDULE A
DEFINITIONS
"DOCUMENTATION COMPONENTS" shall mean the supplemental disk sets and
Product documentation available from Microsoft World Wide Fulfillment.
"ENROLLMENT AGREEMENT" shall mean the Microsoft Select Enrollment
Agreement in the form provided by MS to be signed by each Select Customer and
MS, and approved by COMPANY.
"ENROLLMENT AGREEMENT NUMBER" shall mean the number assigned by MS to a
given Enrollment Agreement.
"ENROLLMENT FORM" shall mean the Microsoft Select Enrollment Form in the
form provided by MS to be signed by each Select Customer and MS.
"ENTERPRISE CUSTOMER" shall mean any company having a valid Enterprise
Enrollment Agreement under MS's Select volume licensing program.
"LARGE ACCOUNT RESELLER" shall mean any reseller which MS has authorized
to distribute licenses to Select Customers.
"LARGE ACCOUNT RESELLER AFFILIATE" shall mean any entity which owns,
controls, is owned or controlled by, or under common ownership or control
with the Large Account Reseller. For the purposes of this Addendum, an entity
is "controlled" by another if that other company or legal entity, either
directly or through its control of another company or legal entity: (i) holds
the majority of voting rights in it, (ii) is a member of it and has the right
to appoint or remove a majority of its board of directors; or (iii) is a
member of it and controls alone or under an agreement with other shareholders
or members, the majority of the voting rights in it.
"LEAD CUSTOMER" shall mean the company or entity signing a Master
Agreement.
"LEAD CUSTOMER AFFILIATE" shall mean a company or legal entity which
owns and controls, is owned or controlled by, or is under common ownership
and control with the Lead Customer.
"LICENSE AGREEMENT(S)" shall mean the license agreement attached to the
Enrollment Form.
"MASTER AGREEMENT" shall mean the Microsoft Select Master Agreement in
the form provided by MS to be signed by a given Select Customer or an entity
acting on behalf of the Select Customer.
"MASTER AGREEMENT NUMBER" shall mean the number assigned by MS to a
given Master Agreement.
"SELECT CUSTOMER" shall mean the Lead Customer, any Lead Customer
Affiliate and/or identifiable division, business unit or office location of
the Lead Customer or Lead Customer Affiliate identified as the Select
Customer on an Enrollment Form or identified as an "Enrollment Customer", as
that term is defined in the Microsoft Select version 4.0 or in any Enrollment
Agreement. This definition shall also include "Enrollment Customers" as such
terms are defined in the Microsoft Select version 4.0.
"SELECT PROGRAM ADMINISTRATOR" shall mean the individual appointed by
COMPANY to act as COMPANY's primary contact with respect to the Microsoft
Select Program.
"SELECT SOFTWARE PRODUCT" shall mean the MS software as designated from
time to time by Microsoft which may be reproduced pursuant to an Enrollment
Form, excluding Documentation Components.
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SCHEDULE B
COMPANY SELECT PRICE SCHEDULE
[Schedule B to this document
contains no information.]
9