** CONFIDENTIAL TREATMENT REQUESTED Exhibit 10.36
PREFERRED DISTRIBUTOR AGREEMENT
THIS AGREEMENT effective as of this 1st day of June 1998, by and between NEC
America, Inc., a corporation having a principal place of business at ▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as "NEC")
and Arch Communications, a corporation having a principal place of business at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇, 01581(hereinafter referred to
as "DISTRIBUTOR") (collectively hereinafter referred to as the "Parties").
WITNESSETH
WHEREAS, NEC has certain paging products to sell, (hereinafter referred to as
"Paging Products")
WHEREAS, DISTRIBUTOR desires to purchase such Paging Products from NEC;
NOW THEREFORE, in consideration of the undertakings, covenants and premises
herein set forth, the Parties hereto mutually agree as follows:
1. Products, Prices, Quantity.
1.1 The prices for the Paging Products shall be as set forth in Attachment
"A" attached hereto and incorporated herein.
1.2 DISTRIBUTOR agrees to purchase and take delivery of a minimum quantity
of Paging Products over a specified term set forth in ATTACHMENT "A" .
1.3 Alterations to any Paging Products which NEC deems necessary to comply
with specifications, changed safety standards or governmental
regulations, to make the Paging Products non-infringing with respect to
any patent, copyright or other proprietary interest, or to otherwise
improve a Paging Products may be made at any time by NEC without prior
written notice to or consent of DISTRIBUTOR and such altered Paging
Products shall be deemed to be fully conforming.
1.4 This is a non-exclusive Distributor Agreement. NEC reserves the right to
sell any Paging Products to any third party in any manner in which it
sees fit. In addition, DISTIRBUTOR maintains the right to purchase any
similar products from any third party.
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2. Term and Termination of the Agreement.
2.1 The period which DISTRIBUTOR may purchase Paging Products under this
Agreement shall commence on the effective date of this Agreement as
written above and shall continue for a period of not less than 14
months.
2.2 Either party may re-evaluate the terms of this Agreement and negotiate
with the other party in an effort to reach a consensus concerning any
desired modifications. Such negotiations may be held once every six
months for the duration of this Agreement. If agreement cannot be
reached concerning modified terms, this agreement may be terminated by
either party upon thirty (30) days written notice to the other party.
2.3 Either party shall have the right to terminate this Agreement if the
other party rejects or fails to perform or observe any of its
obligations hereunder, and such condition is not remedied within thirty
(30) days after written notice is given to the defaulting party.
2.4 Either party shall have the right to terminate this Agreement if the
other party assigns this Agreement, or any of the rights hereunder,
except to a corporate affiliate which assignment is specifically
allowed.
2.5 Termination of this Agreement, howsoever caused, shall not terminate
DISTRIBUTOR's liability to pay for any Paging Products previously
shipped to DISTRIBUTOR.
2.6 Sections 2, 8, 9, 13, 14, and 17 shall survive termination of this
Agreement.
3. Purchase Orders.
3.1 All orders for Paging Products must be accompanied by a purchase order
from DISTRIBUTOR transmitted via facsimile or other mutually acceptable
format or delivered to NEC. Specific purchase orders shall specify the
type and quantity of Paging Products ordered, unit and extended pricing,
as well as desired shipping schedule and ship-to instructions.
Acknowledgment of receipt of purchase orders shall not constitute
acceptance. Any contingencies contained in such purchase orders are not
binding upon NEC.
3.2 DISTRIBUTOR's purchase orders shall be accepted upon NEC's transmission
of a "Sales Acknowledgement" form for the Paging Products. If
DISTIRBUTOR does not object in writing to such Sales Acknowledgment form
within seven (7) days after receipt of such form then the order, as
accepted in the Sales Acknowledgment form, shall be firm.
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3.3 DISTRIBUTOR hereby grants NEC, its successors and assigns, a security
interest in all of the Paging Products ordered by DISTRIBUTOR, and the
proceeds of all such Paging Products (including, but not limited to, the
related accounts), and in contracts rights related to any of such Paging
Products, to secure payment of the purchase price of any such Paging
Products. Default in payment of such price shall permit NEC, at its sole
discretion, to declare all of DISTRIBUTOR's obligations owing to NEC to
be immediately due and payable, and in such event NEC shall have all the
rights and remedies of a secured party under the applicable Uniform
Commercial Code. In connection with the security interest granted
herein, NEC is expressly authorized by DISTRIBUTOR, at its sole
discretion and as DISTRIBUTOR's attorney-in-fact, to file any financing
statements necessary under applicable law to perfect this security
interest (without DISTRIBUTOR's signature in states where such filings
are permitted); and DISTRIBUTOR agrees to sign, as debtor, and
immediately return to NEC any such financing statement that NEC may in
its sole discretion choose to submit to DISTRIBUTOR for signature.
4. Shipment.
4.1 All shipments will be made from NEC's designated warehouse. Shipment
will be to a DISTRIBUTOR location designated in the Sales Acknowledgment
form. DISTRIBUTOR shall be responsible for all shipping charges. The
standard method of shipping will be via ground transportation. Requests
for other shipping methods, including expedited shipments will be paid
by DISTRIBUTOR.
4.2 If DISTRIBUTOR requests that any of the Paging Products be drop-shipped
to separate locations, such instructions and authorization must be
submitted to NEC in writing and approved by NEC which approval shall not
be unreasonably withheld.
4.3 Any discrepancies concerning the quantity of Paging Products shipped to
DISTRIBUTOR or drop-shipped for DISTRIBUTOR must be reported to NEC
within fifteen (15) days of delivery.
5. Payment.
5.1 The terms of payment shall be net due sixty (60) days from date of
invoice. NEC shall invoice DISTRIBUTOR for the Paging Products at the
time of shipment.
5.2 DISTRIBUTOR shall be responsible for all taxes, fees, shiping charges or
other charges imposed by any governmental entity arising with respect to
the sales of Paging Products to DISTRIBUTOR. All amounts due NEC
hereunder shall be net of any such charges, except any taxes that may be
based on NEC's net income, for which NEC shall be solely responsible.
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6. Marketing Support.
6.1 Marketing Support shall be as listed in ATTACHMENT "B", attached hereto
and incorporated herein.
7. Price Protection.
7.1 If and when NEC shall reduce the price of particular models of Paging
Products, the DISTRIBUTOR shall be entitled to the benefit of such price
reduction for all units of such Paging Products model which is equal to
those Paging Products purchased by DISTRIBUTOR, the day after the
effective date of price reduction. In addition, NEC reserves the right
to increase the price of any Paging Products upon thirty (30) days
written notice to DISTRIBUTOR.
7.2 Distributor shall receive benefit of such price reduction on all orders
unshiped by NEC at the of such price reduction
8. Warranty, Returns, Service.
8.1 NEC's warranty obligations are stated in ATTACHMENT "D", attached hereto
and incorporated herein.
8.2 THE LIMITED WARRANTIES PROVIDED FOR IN ATTACHMENT D ARE IN LIEU OF ALL
OTHER WARRANTIES AND GUARANTEES, WHETHER EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OR ARISING FROM A COURSE OR
DEALING, USAGE, OF TRADE PRACTICE TO THE EXTENT ALLOWED BY APPLICABLE
LAW. NEC'S AND ITS SUPPLIER'S ENTIRE LIABILITY, AND ORIGINAL END-USER
PURCHASER'S EXCLUSIVE REMEDY UNDER ANY WARRANTY IS LIMITED SOLELY TO THE
REPAIR OR REPLACEMENT OF THE DEFECTIVE PART OR PRODUCT (IN NEC OR ITS
SERVICE CENTER'S DISCRETION) OR TO ISSUING CREDIT FOR THE DEFECTIVE PART
OR PRODUCT. IF ANY PRODUCT BECOMES DEFECTIVE DURING THE WARRANTY PERIOD,
THE ORIGINAL END-USER PURCHASER SHALL RETURN THE DEFECTIVE PART OR
PRODUCT FOR INSPECTION AND TESTING SUBJECT TO NEC'S STANDARD REPAIR AND
RETURN POLICIES IN EFFECT AT THE TIME OF RETURN. IN NO EVENT SHALL NEC
BE LIABLE FOR ANY DEFECTIVE CONDITION OF SUCH PART OR PRODUCT, IF, IN
NEC'S DISCRETION, INSPECTION AND TESTING DISCLOSE THAT THE DEFECTIVE
CONDITION OF SUCH PART OR PRODUCT WAS CAUSED BY MISUSE, ABUSE, IMPROPER
OR UNAUTHORIZED MAINTENANCE OR REPAIR, ALTERATION, ACCIDENT OR
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NEGLIGENCE IN USE OR DAMAGE CAUSED BY EXCESSIVE TEMPERATURE OR HUMIDITY
OR OTHER IMPROPER ENVIRONMENTAL CONDITIONS, STORAGE, TRANSPORTATION, OR
HANDLING.
8.3 DISTRIBUTOR shall comply with NEC's reasonable procedures related to the
tracking of in-bound returned Paging Products.
9. Limitation of Liability.
9.1 WHETHER OR NOT CAUSED BY NEGLIGENCE, NEITHER PARTY SHALL BE LIABLE FOR
ANY INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR INCIDENTIAL DAMAGES,
HOWEVER CAUSED (INCLUDING LATE DELIVERY) EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBLITY OF SUCH DAMAGES.
9.2 EXCEPT AS SPECIFICALLY PROVIDED FOR IN THIS AGREEMENT, ALL LIABILITY OF
NEC UNDER THIS AGREEMENT, UNDER ANY LEGAL OR EQUITABLE THEORY, SHALL BE
LIMITED TO MONEY PAID TO NEC FOR SUCH PRODUCT OR ACCESSORY FOR THE
CELLULAR TELEPHONE PRODUCTS.
10. Force Majeure.
10.1 Neither party shall be liable or deemed to be in fault for any delay or
failure in performance under this Agreement or interruption of service
resulting directly or indirectly from acts of God, civil or military
authority, acts of public enemy, war, accidents, fires, explosions,
earthquakes, floods, the elements, epidemics, strikes, labor disputes,
shortages of fuel, power, suitable parts, materials, labor or
transportation, product shortages however caused, whether in its own
enterprise, or any cause beyond the reasonable control of such party in
the above instances, time for performance shall be extended for the
period of the delay caused; provided, however, that either party may
cancel in writing the undelivered portion of the order if the delay
exceeds sixty (60) days from the shipment date originally confirmed by
NEC.
11. Indemnity for Infringement, Injunction.
11.1 NEC agrees to defend and indemnify DISTRIBUTOR against any claim that
the Paging Products sold by NEC hereunder infringe the intellectual
property right of third parties provided that: (i) Paging Products are
not modified by DISTRIBUTOR or by any other party at the direction of
DISTRIBUTOR; (ii) DISTRIBUTOR notifies NEC in writing within thirty (30)
days of the claim; (iii) NEC has sole control of the defense and all
related settlement and licensing negotiations; and, (iv) DISTRIBUTOR
provides NEC with the assistance, information and authority necessary to
perform NEC's obligations under this Section; provided always that
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DISTRIBUTOR shall not admit liability of NEC under any circumstances.
Reasonable out-of-pocket expenses incurred by DISTRIBUTOR in providing
such assistance will be reimbursed by NEC. DISTRIBUTOR shall be
permitted to participate in any such defense at its own expense and with
counsel of its choice. In the event that NEC fails or refuses to defend
against any claim or suit, DISTRIBUTOR may do so and NEC agrees to
reimburse DISTRIBUTOR for its documented costs and expenses.
11.2 If the use or sale of any Paging Products furnished hereunder is
enjoined as a result of any suit, NEC at its option and no expense to
DISTRIBUTOR shall: (i) obtain for DISTRIBUTOR the right to use, sell or
re-sell said items; or shall (ii) substitute an equivalent product
reasonably acceptable to DISTRIBUTOR and extend this indemnity thereto;
or of (i) or (ii) cannot be reasonably attained for commercial reasons,
NEC shall accept the return of the Paging Products and reimburse
DISTRIBUTOR the purchase price thereof, less a reasonable charge for
wear and tear.
12. Governing Law.
12.1 The validity, interpretation, and performance of this Agreement shall be
controlled by and construed under the laws of the State of New York,
United States of America, as if performed wholly within the state
without giving effect to the principles of conflict of law. The Parties
specifically disclaim the UN Convention of Contracts for the
International Sale of Goods.
13. Confidentiality.
13.1 Any specifications, drawings, sketches, models, samples, confidential
business information or data, written, oral or otherwise ("Information")
obtained by either party hereunder or in contemplation hereof shall
remain the property of the party originating the information. All such
Information shall be kept confidential and not reproduced or distributed
in any manner without the expressed written permission of the
originating party. All copies of such Information shall be returned upon
request.
13.2 The obligations imposed on either party under Section 14.1 above shall
not apply to information whether or not designated as "Confidential":
(i) which is made public by the disclosing party; (ii) which the
receiving party can reasonably demonstrate is already in the possession
of the receiving party and not subject to an existing agreement of
confidence; (iii) which is received from a third party without
restriction and without breach of this Agreement; (iv) which is
independently developed by the receiving party as evidenced by its
records; (v) which the receiving party is required to disclose pursuant
to a valid order of a court or other governmental body or any political
subdivision thereof, provided, however, that the recipient of the
information shall first have given notice to the disclosing party so
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that the owning party may seek to obtain a protective order requiring
that the information and/or documents so disclosed be used only for the
purposes for which the order was issued.
13.3 The Parties agree that this Agreement (including all Attachments or
Exhibits attached hereto) is confidential and shall not be disclosed to
any third party.
13.4 The obligations in this Section shall survive termination of this
Agreement for five (5) years.
14. Trademarks.
14.1 It is expressly agreed and understood that trademarks, trade names,
insignia, etc. (hereinafter referred to as "Marks") involving the words
"NEC", designated trademarks of NEC, or " " are and shall remain the
exclusive property of NEC and DISTRIBUTOR (as applicable) and that the
other party has and shall have no right to such trademarks and trade
names. All use of Marks involving the words "NEC", designated trademarks
of NEC, or " " (as applicable) in the promotion and sale of goods shall
be deemed to inure only for the benefit of the owner of such Marks.
Neither party without the express written consent of the other, shall
have the right to use any Marks in the sale, lease or advertising of any
products or on any product container, component part, sales, advertising
or promotional materials. Any approved use of the Marks shall be in
accord with such party's policies governing the size, typeface and other
usage requirements.
14.2 If DISTRIBUTOR requests that any of the Paging Products are to be sold
to DISTRIBUTOR bearing any trademark other than the "NEC" trademark or a
designated trademark of NEC, the terms and conditions concerning such
private labeling of the Paging Products shall be subject to the mutual
written agreement of the Parties. DISTRIBUTOR shall indemnify and hold
NEC harmless from any liability, judgments, decrees, costs and expenses,
including reasonable attorney(s) fees incurred by NEC, for suits brought
by any party against NEC related to NEC affixing any trade names, logos,
or trademark(s) on the Paging Products in accordance with any
instructions given by DISTRIBUTOR.
15. Publicity.
15.1.1 DISTRIBUTOR and NEC agree to submit to each other for approval any press
releases and all other publicity matters whenever the other's name is
used in connection with matters pertaining to the relationship
established by this Agreement, and shall not use each other's name in
such matters without prior written approval. Both parties agree not to
unduly restrict the release of such information.
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16. General.
16.1 This Agreement expresses the entire understanding and agreement of the
Parties with reference to the sale of NEC Paging Products to DISTRIBUTOR
and is a complete and exclusive statement of the terms of this
Agreement, and no representations, amendments, or agreements modifying
or supplementing the terms of this Agreement shall be valid unless in
writing, signed by persons authorized to sign agreements on behalf of
each party. NEC will not be bound by terms of DISTRIBUTOR's order. Only
NEC's acknowledgement of such order through transmission of a shipping
schedule shall constitute valid acceptance of DISTRIBUTOR's order. Any
such acceptance is expressly conditioned on assent to the terms hereof
and the exclusion of all other terms. DISTRIBUTOR shall be deemed to
have assented to the terms hereof, whether or not previously received,
upon accepting delivery of anything shipped from NEC. If tender of these
items is deemed an offer, acceptance is expressly limited to the terms
hereof.
16.2 During the term of this Agreement DISTRIBUTOR's purchase of Paging
Products from NEC, shall be subject to and made under the terms and
conditions of this Agreement. The terms and conditions of DISTRIBUTOR's
purchase orders, NEC's acknowledgments or any other writings by either
party which differ from the terms and conditions hereunder shall not be
effective unless specifically accepted in writing by amendment to this
Agreement made separate and apart from said terms and conditions. All
orders are subject to acceptance at NEC's home office in Irving, Texas.
No person shall have the authority to accept any order on behalf of NEC
outside of NEC's Irving, Texas office.
16.3 No waiver by NEC or DISTRIBUTOR of any of the terms, conditions,
covenants or agreements of this Agreement shall be binding unless in
writing and signed by the party to be charged, and no such waiver shall
be deemed or taken as a waiver at any time thereafter of the same or any
other term, condition, covenant or agreement herein contained, nor of
the strict and prompt performance thereof. A waiver by course of
performance to any of the terms and provisions hereunder on one occasion
will not be construed as a waiver for any other occasion.
16.4 If any one or more provision of this Agreement is deemed to be
unenforceable, the Parties hereby express by agreement that the
remainder of this Agreement is nevertheless to be fully enforced and to
be interpreted as valid in every respect except for such unenforceable
provisions.
16.5 The Parties mutually agree that the headings and captions contained in
this Agreement are inserted for convenience or reference only, and are
not to be deemed part of, or to be used in interpreting, this Agreement.
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IN WITNESS WHEREOF, this Agreement was entered into as of the day and
year first written above.
ATTACHMENTS: Paging Products and Pricing (Attachment A)
Marketing Support (Attachment B)
Limited Warranty (Attachment C)
Coop Guidelines (Attachment D)
ACCEPTED: ACCEPTED:
ARCH COMMUNICATIONS NEC AMERICA, INC.
BY: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ N. Norose
NAME: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ NAME: N. Norose
TITLE: President TITLE: General Manager
DATE: May 27, 1998 DATE: May 28, 1998
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** CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT A
QUARTERLY "MAY"
CONTRACT ACHIEVEMENT SPECIAL
PRODUCT PRICE INCENTIVE INCENTIVE DISCOUNT
(per unit) (per unit) (per unit) (per unit)
Message Maker $ **
Exec $ ** $ **
Companion* $ ** $ **
VUE* $ ** $ ** $ **
Contract Incentive: DISTRIBUTOR shall purchase and take delivery of the
following quantities of Paging Products:
1. ** NEC Alpha Paging Products Monthly, (VUE/Companion)
(Minimum ** VUEs Monthly)
The contract incentive, listed above, shall be made available to DISTRIBUTOR for
meeting these minimum quantity commitments. Contract Incentive is deducted from
invoice.
Quarterly Achievement Incentive will be deducted from invoice. DISTRIBUTOR
agrees to reimburse in full any Quarterly Achievement Incentive monies back to
NEC within 15 days of notification for each quarter that DISTRIBUTOR fails to
take delivery of the minimum committed quantity of ** alphas (VUE/Companion)
May Special Discount will be deducted from invoice. In order to teceive the May
Special Discount, DISTRIBUTOR must place firm purchase orders for the Exec or
Companion during the month of May, 1998. Product must ship prior to December 31,
1998.
Notwithstanding the above, from the effective date of this Agreement, NEC will
extend to DISTRIBUTOR all Contract Incentives and Quarterly Achievement
Incentives without regard to minimum quantity commitments for a period of (2)
two months. All minimum quantity commitments shall become effective as of the
third month of the term of this agreement.
*Includes 2 year warranty = labor & materials for two years.
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ATTACHMENT B
MARKETING SUPPORT:
1. NEC agrees to make available to DISTRIBUTOR marketing co-op funds based
upon two (2%) of the purchase price of the Paging Products. In
calculating the amount of co-op funds available, any other credits,
discounts or rebates extended to DISTRIBUTOR shall first be deducted
from the purchase price before calculating the two percent. Co-op funds
will be posted to the DISTRIBUTOR account monthly by the tenth (10th)
day of each month for purchases of Paging Products in the prior month.
DISTRIBUTOR shall use the co-op funds to promote the "NEC" brand in
targeted markets selected from time to time by DISTRIBUTOR, in
accordance with NEC's co-op advertising program.
2. NEC will provide each Distributor location with sales and product
training on an on-going basis, at no cost to Distributor. This will
include, but not be limited to, training materials, prodcut
demonstrations, and presentation by the NMI sales and training staff.
3. Due to substantial pricing considerations to Distributor, Distributor
will not be allowed to participate in sales promotional programs as
offered by NEC to customers from time to time, nor receive any
addidtional funding from NEC for sales activities. Should a promotion
create a lower net unit price than Distributor's net price, an exception
can be granted should both parties agree.
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ATTACHMENT C
1. What Product May Be Covered By This Warranty?
The following products (the "Product" or the "Products") purchased through
an NEC America, Inc. ("NECAM"), Mobile Radio Division Authorized Dealer
(the "Dealer") in the United States may be covered by this warranty:
MESSAGE MAKER
VUE
EXEC
COMPANION SP
2. What Does This Warranty Cover?
NECAM warrants to the original end user purchaser of the Products ("You")
that the Products will conform to the applicable published specifications
in effect at the time of shipment from NECAM for the Dealer, and that the
Products will be free from defects in materials or workmanship under normal
use and service during the warranty period described in Paragraph 3.
3. How Long Does The Coverage Last?
The warranty period will begin on the date You purchased the Product. Dated
proof of purchase (e.g. cash register receipt) is to accompany and Product
returned for warranty service. However, if proof of purchase is not
available, the warranty period begins on the date the Product is shipped
from NECAM to the Dealer. The warranty periods for the Products, excluding
any battery cell or assembly, is as follows.
One (1) Year Parts/One Year Labor
The warranty period for any battery cell or assembly is ninety (90) days.
Any products repaired or replaced under the terms of this warranty are
covered under warranty for the remainder of the original warranty period of
ninety (90) days if there are less than ninety (90) days remaining in the
original warranty period.
4. What Will NECAM Do If The Product Becomes Defective In Materials Or
Workmanship During The Warranty Period?
If any Product covered under this warranty becomes defective in materials
or workmanship during the applicable warranty period, NECAM will, at its
option, either repair the defective Product without charge for parts and
labor, or provide a replacement in exchange for the defective Product.
5. What Is Not Covered By This Warranty?
(a)This warranty does not extent to (i) Products which have been subjected
to misuse, accident, physical damage, improper installation, abnormal
operation or handling, neglect, inundation, fire, water or other liquid
intrusion; or (ii) Products which have been repaired, altered, or
modified by anyone other than an authorized service representative of
NECAM; or (iii) defects caused by failure of components, parts, or
accessories not compatible with the warranted Product; or (iv) Products
whose warranty/quality stickers, product serial number plates or
electronic serial numbers have been removed, altered, or rendered
illegible; or (v) accessory items such as antennae, cables, curl cord,
cases, etc.; or (vi) Products shipped to NECAM for repair from outside
the United States.
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ATTACHMENT D
NEC AMERICA, INC.
Communications Terminals Group
1998 Cooperative Marketing Program
Guidelines and Procedures
--------------------------------------------------------------------------
A. PURPOSE
The objective of the NEC America, Inc.'s Communications Terminals Group ("NEC")
Cooperative Marketing Program ("Co-op") is to effectively and consistently
promote the sale of NEC wireless products through various advertising and
promotional programs.
B. ELIGIBILITY
The Cooperative Marketing Program is available to authorized NEC customers* who
purchase wireless messaging or cellular products and whose advertising and
marketing plans comply with the requirements of the Program, and are approved in
accordance with the Program.
Co-op eligibility may be denied where special sales conditions or other
promotions prevail.
C. HOW A CO-OP FUND IS ACCRUED
A co-op account is set up for each NEC customer who is eligible and has an
established NEC account number.
1. Funds are accrued on a monthly basis in the co-op account at 2% of the net
invoiced purchase price of new wireless products, net of all allowances
shown on the invoice.
2. No funds are accrued for the purchase of accessories, spare parts, test
equipment, or custom or reconditioned products.
3. Accrual is based on net unit shipments, as recorded by NEC management
reports.
* Authorized NEC customers include carriers, distributors, dealers and other
groups that buy products directly from NEC.
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D. USE OF CO-OP FUNDS
1. Co-op marketing funds can be used for a variety of advertising and
promotional activities. Reimbursement rates vary depending upon how they
are used. The following charts reflect these variations.
--------------------------------------------------- ----------------------------------- -------------------------------------
CATEGORY 100% 50%
REIMBURSEMENT REIMBURSEMENT
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
1. Advertising: Net Media costs less Ads produced and supplied by NEC Ads produced by customer complying
taxes, discounts, rebates and commissions with NEC guidelines. Note: Ad
for; reimbursement may be prorated based
o Newspapers on actual amount of NEC brand name
o Magazines and product exposure.
o Radio
o Television
o Yellow Pages
o Outdoor (Billboards, bus-boards)
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
2. Collateral and Merchandising Items Items produced and supplied by NEC Items produced by customer
o Brochures complying with NEC guidelines.
o Specification Sheets Note: Item reimbursement may be
o Posters prorated based on actual amount of
o Banners NEC brand name and product exposure.
o Displays
o Catalogs
o Display (Dummies) Products
o Merchandising Kits
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
3. Premium Incentive Items Items produced and supplied by NEC Items produced by customer and
complying with NEC guidelines.
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
4. Sales Promotions and Contests Promotions produced and supplied Promotions produced by customer may
by NEC receive up to 50%, depending upon
amount of NEC exposure.
Pre-approval required.
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
5. Special Events Not available Special events sponsored by
o Open House customer may receive up to 50%,
o Sales Training depending upon amount of NEC
o Store Openings exposure. Pre-approval required.
---------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
6. Trade Shows Not available Up to 50% of floor space fees,
depending upon amount of NEC
exposure. (Maximum of $10,000 per
year). Pre-approval required.
---------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
7. Motorsports When used with NEC Motor Sports Not Available
programs only.
--------------------------------------------------- ----------------------------------- -------------------------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
8. Internet (Worldwide Web) Not available Up to 50%, depending upon amount of
NEC exposure. (Maximum of $10,000
per year). Pre-approval required.
----------------------
--------------------------------------------------- ----------------------------------- -------------------------------------
* Note: Ads or materials featuring competitive products receive
proportionately reduced co-op reimbursement depending on number of
other manufacturers featured.
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E. NEC GENERAL REQUIREMENTS FOR REIMBURSEMENT
The NEC logo must be correctly represented in its logo font style and utilized
in all applicable mediums. When a NEC product photograph is used, the NEC name
or logo must also appear in the advertisement or printed material within the
body copy or near the product photograph. Logo sheets, specifications, and
photographs are available through the Sales Promotions Group by calling
▇.▇▇▇.▇▇▇.▇▇▇▇ and selecting the appropriate option.
If you are requesting 50% reimbursement, prior approval must be given for your
advertising or program. This approval must be given prior to the actual
production or airdate of the advertising/program/item. Upon receipt of written
approval, you may file claims in the usual manner.
To receive prior approval, please mail or send via facsimile, all program
materials, photographs, media schedules and any other applicable items to the
attention of:
NEC America, Inc.
Sales Promotions Group
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Toll-free) ▇.▇▇▇.▇▇▇.▇▇▇▇
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1. 50% Co-op -- Advertising:
o Feature the newest photograph or illustration of an NEC wireless
product; minimum size (height) is 1.5 inches depending on overall size
of the advertisement. All product logos must be shown and visible.
o Show the NEC name in the copy or near the product. The minimum font
size for the NEC name outside of the body copy is 12pt.
o Include product brand name near the product. Examples:
- DigitalTalk(TM) 2000
- MessageMaker Vue(TM).
2. 50% Co-op -- Collateral, Merchandising, and Premium Incentive Items:
o Feature the newest photograph or illustration of an NEC wireless
product.
o For premium items, the NEC name, logo or product brand name featured
on the item is sufficient.
o When copy is applicable, such as with collateral or on merchandising,
list the NEC name and/or product brand name.
3. 50% Co-op -- Radio
o 30 Second Radio spots produced by YOU must include two mentions of the
NEC name. The mentions can be noted in relationship to NEC products.
o 60 Second Radio spots produced by YOU must include two mentions of the
NEC name and/or product brand name.
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4. 50% Co-op -- TV
o 30 Second TV spots produced by YOU must include two mentions of the
NEC name and/or product brand name. The mentions can be noted in
relationship to NEC products.
o A close-up of a NEC product must be featured once during the airing of
the spot - the logo must be readable.
o 60 Second TV spots produced by YOU must include two mentions of the
NEC name and/or product brand name plus the tagline: Just Imagine NEC
Multimedia.
o A close-up of a NEC product must be featured once during the airing of
the spot - the logo must be readable.
o Minimum point size for logo, name, or tagline is 26pt.
5. Up to 50% Co-op -- Internet
o Banner and web site advertising space must include the NEC logo and/or
product brand name, and actual product photographs or illustrations.
o Color product photographs or illustrations are mandatory unless the
web site features only a black and white format.
F. FUND TERM
The fund is accrued on a calendar year basis; January 1st through December 31st.
Claims can be filed any time during the accrual period but no later than March
15th following previous calendar year.
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Co-op Fund Advertisement Must Be Claims Must Be
Accrual Period Run Between Filed No Later Than
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Jan. 1st - Dec. 31st Jan. 1st - Dec. 31st Mar. 15th, After Calendar Year
-------------------- ---------------------- -------------------------------
* NOTE: ALL UNCLAIMED FUNDS WILL BE AUTOMATICALLY FORFEITED ON THE MARCH 15th
FILING DEADLINE.
G. CLAIM VERIFICATION
To file a Claim for reimbursement of media placements and print production, a
NEC Cooperative Advertising Claim Form (CCF01) must be completed and sent along
with the proper documentation as specified by media type. Without a CCFO1, the
claim will not be processed.
The following items are required with each claim filed:
1. Advertising
o Newspaper/Magazine (NEC pays space cost only.)
- Original tear sheet for each date the ad appeared (photocopies are not
acceptable) showing the publication name and date.
- Copy of the paid invoice indicating cost of the space, less all
discounts and rebates, and the frequency contract if applicable.
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o Yellow Pages (NEC pays space cost only).
- The original tear sheet indicating the publication name and date
(photocopies will not be accepted). The tear sheet is needed for
monthly or annual reimbursement.
- If you are claiming annual reimbursement, include a copy of the paid
invoice that states the directory name, month published and annual
cost.
- If billed monthly by the telephone company, file reimbursement claims
by:
1). Forwarding a copy of the monthly paid invoice to NEC Customer
Support Group.
2). Waiting until all 12 monthly invoices are collected, then filing
one annual claim.
3). Receive annual reimbursement by sending a copy of the contract
showing the directory name, date published, size of ad and cost
along with the first month's invoice.
o Radio/Television (NEC pays time cost only.)
- Copy of the paid invoice with length of commercial, date(s), number of
spots aired, frequency rate, cost per spot, and total cost.
- Copy of radio/TV script with notarized ▇▇▇/RAB documentation for radio
or ▇▇▇/TVB documentation for TV with original signature of a station
official.
- Include a copy of the script with NEC reference used (or a storyboard
for TV), or the script must have video detail notations referencing
what is actually being shown during the narrative.
o Outdoor Billboards (NEC pays space cost only.)
- Copy of the paid invoice indicating where, when, and duration of time
the board was posted.
- Actual photo of the billboard or bus-board.
2. Collateral and Premium Incentive Items produced by the Customer
o Pre-approval required.
o Original sample of item.
o Copy of paid invoice indicating net cost, less any discounts, rebates
and commissions.
3. Sales Promotions and Contest produced by the Customer
o Pre-approval required.
o Complete promotion or sales contest description, including rules and
structure for awarding prizes.
o Copy of paid invoice for promotion and/or prizes, indicating net cost,
less any discounts, rebates and commissions.
4. Special Events and Trade Shows
o Pre-approval required.
o Complete event description, including dates, NEC products displayed
and attendance.
o Photographs or other proof of performance reflecting the amount of NEC
product exposure.
o Copies of paid invoices indicating net cost, less any discounts,
rebates and commissions
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5. Motorsports
o Photographs of company logo on NEC program car.
o Copy of paid invoice indicating net cost, less any discounts, rebates
and commissions.
6. Internet
o Copy of advertisement with website address.
o Copy of paid invoice indicating net cost, less any discounts, rebates
and commissions.
H. TO FILE A CLAIM FOR FUNDS
To file a claim, YOU must fill out an NEC Cooperative Marketing Claim Form
(CCFO1) and send it with all the proper documentation as described in "Section
H". The form and documentation must be sent to:
NEC America, Inc.
Co-op Marketing Program
Customer Support Group
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Literature and promotional items must be ordered on a Literature/Promotional
Order Form (LOF01), indicating on the form that the payment is to be made by
using available co-op funds.
When claim amounts exceed an accrual fund balance, the customer will be
contacted by NEC to determine which of two (2) available options should be used:
Option 1: Delay the reimbursement until enough funds have been accrued to cover
the claim or...
Option 2: Receive partial credit only up to the available amount in the accrued
fund. However, if this option is chosen, the balance of the claim
cannot be resubmitted at a later date for reimbursement of the
remaining amount.
* NOTE: PAYMENTS WILL NOT BE MADE THAT EXCEED THE CUSTOMER'S ACCOUNT BALANCE.
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I. OTHER SPECIAL TERMS AND CONDITIONS
1. NEC will only pay the full allowance on advertisements or promotions that
feature NEC products exclusively. No competitive products may be featured
to obtain the full allowance.
2. If it is not exclusively NEC, NEC reserves the right to prorate the
reimbursement based on the percentage of space dedicated to NEC and its
wireless products.
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3. NEC reserves the right to limit the quantity of literature and promotional
items ordered to a maximum of 25% of the available funds.
4. Items in a foreign language are acceptable; however, an English translation
is required in order to process the claim.
5. NEC reserves the right to suspend payment of claims if a customer's
accounts receivable is not current. Only NEC may choose to apply the fund
as a credit to the customer's account.
6. NEC reserves the right to change the amount of the accrual and the eligible
products and options at any time without prior notice.
7. NEC reserves the right to terminate the co-op program at any time upon
thirty (30) days prior written notice. Sixty (60) days after the date of
discontinuance, all unexpended balances will be canceled.
8. All advertising must be in compliance with local, state and federal laws
and must be "in good taste".
9. All claims in the advertising text regarding NEC products must be truthful.
Any false or misleading representations will result in a rejected co-op
claim.
10. No third-party checks will be issued for any type of advertising. NEC will
not accept direct vendor billing.
11. Exceptions to this program can be granted by the Director of Marketing, as
long as it maintains the intent of the program and is granted in writing.
12. ALL state, local, or federal taxes that may arise from the use of funds are
the responsibility of the customers.
13. The NEC logo and/or the name NEC in Helvetica bold typeface may not be
used. The use of the NEC logo and name must conform to NEC Corporate
Guidelines. (Camera-ready art is available from NEC).
14. All claims must be submitted using the NEC claim form, and comply with all
the guidelines contained herein, or they will be returned, unpaid.
15. The cost of local preparation and production are not reimbursable under the
NEC Co-op Marketing Program.
16. All claims must be postmarked within 60 days from the date the advertising
or promotions are completed or appear within their designated medium.
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