CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
Exhibit 10.21
ADDENDUM
PRODUCT SERVICE AGREEMENT
RETURNS ONLY
THIS PRODUCT SERVICE (RETURNS ONLY) ADDENDUM ("Service Agreement") is effective
as of September 21, 2001 ("Effective Date"), and is attached to and incorporated
in the Vendor Agreement between Best Buy Co., Inc., its affiliates and
subsidiaries ("Best Buy") and NETGEAR, INC. ("Vendor"), dated September 20, 2001
1. To the end of Section 7 ("Returns") of the Vendor Agreement, the
following paragraph shall be added:
WARRANTY RETURNS. Vendor's end-user warranty statement
accompanies the product when sold. Vendor appoints Best Buy as
an "Authorized Return Center" for the return of those Products
under warranty. Best Buy will (1) receive the in-warranty
Product from the customer, (2) provide a new Product
("Replacement Product") to the customer, and (3) send the
customer's defective Product to Vendor after receiving
Vendor's RA. The appointment of Best Buy as an Authorized
Return Center include all present and future Best Buy
locations which Best Buy designates to accept the Product
returns. The appointment of Best Buy as an Authorized Return
Center is on a non-exclusive basis; Vendor may appoint other
parties as Authorized Return Centers. If this Agreement is
terminated or expires, this Section 7 will continue in full
force and effect for the amount of time and to the extent
necessary for Best Buy to distribute the remaining Products in
accordance with Section 17, plus the applicable time period of
the warranty for each such Product, plus the time period
specified or allowed under this Agreement for Best Buy to
return defective Product and be reimbursed for shipping and
Replacement Products.
2. Best Buy's Products Returns Department is the appropriate point of
contact for questions and inquiries related to this Service Agreement.
3. The paragraph entitled "Survival" within Section 27 of the Vendor
Agreement shall be deleted and replaced in its entirety with the following
paragraph:
SURVIVAL: The expiration or termination of this Agreement
shall not terminate vested rights of either party from any
liabilities or obligations incurred under this Agreement prior
to and which by their nature are intended to survive
expiration or termination, including but not limited to
provisions relating to confidentiality, indemnification,
returns, shipping, and proprietary rights. Vendor understands
and agrees that certain provisions of this Agreement must
survive in order that Best Buy, as an Authorized Return
Center, may satisfy the customer's warranty requests, even
after the completion of this Agreement.
4. All other terms and conditions of the Vendor Agreement, not
specifically amended, changed or modified by this Service Agreement shall remain
in full force and effect. All capitalized terms not otherwise defined herein
shall have the meaning ascribed to them in the Vendor Agreement.
In witness whereof, the parties have executed this Service Agreement.
BEST BUY CO., INC. VENDOR: NETGEAR, INC.
Authorized Officer: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Authorized Officer: [ILLEGIBLE]
--------------- ---------------
(Signature) (Signature)
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇
----------------- -----------------
(Please Print) (Please Print)
Title: [ILLEGIBLE] Title: CEO
BEST BUY PURCHASING LLC
Authorized Officer: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
(Signature)
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
(Please Print)
Title: [ILLEGIBLE]
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
ADDENDUM
CONSIGNMENT AGREEMENT
Effective Date: January 1, 2002________________________
THIS CONSIGNMENT AGREEMENT ("Agreement") is attached to and incorporated in the
Vendor Agreement between Best Buy Co., Inc., its affiliates and subsidiaries
("Consignee") and NETGEAR, Inc., having its principle place of business at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ 95054________________ ("Consignor"),
which became effective on ______________. This Agreement is intended to set
forth the terms and conditions applicable only to the provision of consigned
goods from Consignor to Consignee. Such consigned goods are described on Exhibit
A hereto, as may be amended from time to time by agreement by the parties.
All terms in the Vendor Agreement shall remain in full force and effect with
respect to non-consigned goods. With respect to consigned goods, the following
terms shall supplement the terms of the Vendor Agreement in the event of
conflict the terms of this Agreement will control with respect to consigned
goods.
1. RESERVATION OF RIGHTS AND TITLE. Title to all consignment goods is
reserved in Consignor until sale of the goods by the undersigned Consignee to
Consignee's customers. Consignee agrees to cooperate with Consignor in effecting
the protections afforded consignment sellers under Sections 9-103(d),
9-109(a)(4) and 9-319 of the Uniform Commercial Code as adopted and in effect in
the state of Minnesota, to the extent provided herein. Consignee agrees to
execute UCC-1 financing statements as modified in the form attached as Exhibit
B; provided, however, that Consignor shall be responsible for preparation of
such financing statements for Consignee's review and signature, and for the
filing of such financing statements and payment of all applicable filing and
preparation costs. No security interest shall be granted in the proceeds from
the sale of the consignment goods.
2. SALE OF CONSIGNMENT GOODS. Consignee has sole discretion to determine
the retail price of the consignment products and the right to determine the
amount and frequency of any price reductions. For each sale of a unit of
consignment product, regardless of the retail sale price, Consignee shall pay
Consignor the "Agreed Cost" for such product, as set forth in Exhibit A, minus
the allowances, deductions and vendor chargebacks agreed between the parties as
described elsewhere in this Agreement. Consignment product sold and returned by
a customer in accordance with Consignee's return policy shall not be counted as
a "sale" for purposes of calculating payments to Consignor. Product that is
defective (which includes but is not limited to product that is returned without
the box, with an opened box, or with a damaged box) shall be the responsibility
of Consignor, and may be returned to Consignor unless otherwise mutually agreed.
Any amounts remaining from the sale after payment to Consignor as set forth
herein shall be retained by Consignee. Consignee shall exert commercially
reasonable efforts to sell the consignment products consistent with Consignee's
sales, marketing and merchandising plans which may be amended from time to time.
3. REMITTING PAYMENT FOR SALE OF GOODS; INVOICING; ALLOWANCES; AUDIT
RIGHTS. All transactions (e.g., purchase orders and invoices) shall be conducted
via Electronic Data Interchange (EDI). At the time of shipment of the
consignment goods to Consignee. Consignor agrees to provide Consignee with
initial involves which show quantity and stock-keeping unit (SKU), but which
reflect a "0" total amount. Upon receipt of such goods. Consignee will match
receipts against the "0" invoices and resolve discrepancies (e.g., shortages)
with Consignor each month to assure that the parties agree as to the correct
beginning inventories of consignment goods, at which time any necessary
corrections to the "0" invoices will be made. If Consignor falls to submit "0"
invoices to Consignee to confirm the quantities of goods shipped, Consignee may
in its discretion; (1) make payment to Consignor based upon quantities of goods
as determined by Consignee's inventory records, which will result in a delay in
Consignee's payment to Consignor, or (2) delay its payment to Consignor until
Consignor produces the necessary "0" invoices or other documentation to confirm
quantities of goods shipped.
Consignee shall provide net point of sales data to Consignor via EDI on a weekly
basis (i.e., net of customer returns) at no charge. Subject to the Consignor's
obligation to provide accurate "0" invoices to Consignee on a timely basis,
payment to Consignor will be made [*]. Payment will be based on final estimated
monthly sales, which may not equal the sum of weekly sales transmissions to
Consignor due to sales system corrections posted within two business days after
fiscal month and Consignee may also deduct from payments and agreed-upon
allowances that are not reflected on the invoices. Those agreed
allowances/deductions are set forth below:
ADVERTISING ALLOWANCE: AS PER MARKETING AGREEMENT
DEFECTIVE ALLOWANCE: NONE
PLACEMENT/END CAP ALLOWANCE: NONE
SHRINK ALLOWANCE: NONE
VOLUME REBATE: NONE
[OTHER]:
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Consignor may audit Consignee's books and records pertaining solely to the
subject matter of this Agreement no more than once per year, provided that
Consignee shall be given reasonable written notice, and further provided that
the audit shall take place at Consignee's facilities during normal business
hours. Costs of the audit shall be borne by Consignor, provided that if a [*] or
more discrepancy or shortfall is found. Consignee will reimburse the reasonable
and documented costs of such audit.
4. TAXES. Consignee will be responsible for the collection and remittance
of the appropriate sales tax to the proper taxing authorities and will provide
state resale tax certificates to Consignor. Consignee shall report the
consignment inventory to the proper taxing authorities, as consignment property
within Consignee's possession that is owned by Consignor. Consignee shall pay
directly all necessary and valid property taxes pertaining to the consignment
inventory in Consignee's possession, which amount shall be reimbursed by
Consignor to Consignee via vendor charge-back or other appropriate method. The
personal property tax calculation will be based on the consignment inventory as
listed on Consignee's general ledger. Each party shall be responsible for
reporting its own Income derived from this Agreement and for payment of its own
income taxes.
5. DELIVERY AND PRODUCT MIX. The goods to be sold on consignment and the
Agreed Cost per unit are described in Exhibit A annexed hereto. The quantities
and delivery dates shall be mutually agreed to by Consignor and Consignee.
6. SHIPMENTS. Standard delivery for inbound shipments to Consignee shall
be F.O.B. Destination: Freight Prepaid by Consignor to Consignee's Distribution
Centers and Consignee's Retail Stores. Consignor will ship and pay for all
orders via standard ground shipment in addition, Consignor shall be responsible
for making shipping arrangements, scheduling, tracking, proof of delivery,
trading, insurance for loss or damage while goods are in transit and filing
freight claims for loss and/or damage. If expedited shipment becomes necessary,
in the reasonable opinion of both parties, due to the fault or delay of
Consignor, then Consignor shall pay the costs of such expedited shipments to
either Consignee's distribution centers or via drop ships to Consignee's stores,
as requested by Consignee. If expedited shipment become necessary, in the
reasonable opinion of both parties, due to the fault or delay of Consignee, then
Consignor agrees to ship product, freight collect, to either Consignee's
distribution centers, or stores via drop ship, as requested by Consignee;
Consignee shall then charge back Consignor the difference between the standard
ground shipping costs and the expedited shipping costs. The carrier (not
Consignor) shall invoice Consignee in this latter freight collect situation.
Consignor agrees not to include freight charges on any invoices under any
circumstances.
7. RETURN OF GOODS. Consignee has 100% return rights with respect to the
consignment product, whether in cases of defectives, obsoletes, slow-moving
goods, upon termination, or otherwise. Except as otherwise expressly set forth
in this Agreement, Consignee agrees to arrange and pay for return shipments.
Notwithstanding the foregoing, the undersigned Consignee reserves the right to
return, at Consignor's expense, any goods for which a claim is made that
alleges that the goods (1) Infringe any alleged patent, design, tradename,
trademark, copyright, right of privacy, or any other tangible or intangible
property rights, or (2) are not manufactured, packaged and labeled in accordance
with best industry standards and/or all applicable laws, ordinances, rules and
regulations by governmental departments, bodies and agencies governing and/or
restricting the receipt and sale of goods by the undersigned Consignee, or (3)
have caused injury to person or property. In addition, Consignor agrees to pay
the cost of return shipments of substantially defective product. In all cases,
Consignor agrees to provide a return authorization ("RA") within 48 hours of
request.
8. FURTHER OBLIGATIONS OF CONSIGNEE. Consignee shall make an annual
payment to Consignor at the most recent Agreed Cost per unit for any loss or
damage to the consignment goods while such goods are in the care, custody, and
control of Consignee. Notwithstanding the foregoing, Consignee agrees to use
commercially reasonable efforts to protect and preserve the consignment goods of
Consignor which are in the care, custody or control of Consignee, wherever
located. Consignee further agrees to maintain all-risk property insurance in an
amount adequate to fully insure all consignment goods of Consignor which are in
the care, custody or control of Consignee, wherever located, in an amount not
less than 35 Million, and will name Consignor as a loss payee on such policy
where Consignor's interest appears.
9. FURTHER OBLIGATIONS OF CONSIGNOR.
a. Consignor represents and warrants that (i) Consignor has full
title to the consignment goods, free and clear of all liens, charges and other
encumbrances, and (ii) all merchandise delivered hereunder will have been
manufactured, packaged, and labeled in accordance with best industry standards
and all applicable laws, ordinances, rules, and regulations by governmental
departments, bodies, and agencies governing and/or restricting the purchase,
acceptance, resale, distribution or promotion of such consignment products by
Consignee.
b. Consignor agrees to defend Consignee against and shall
indemnify Consignee and hold Consignee harmless from all losses, costs and
expenses arising from any and all claims, suits and demands by any third party
relating to (1) the copyright, trademark, patent, trade secret, intellectual
property, performance or broadcast rights, property or contract rights
respecting all consignment products for sale, distribution and/or promotional
purposes, including the advertising and merchandising of same, and (2) the use
by Consignee's customers of the consignment products (e.g., product liability
claims). Consignee agrees to provide Consignor prompt notice of any such third
party claims against Consignee and to tender the defense Consignor. Consignor
shall bear all attorneys fees and costs in defending such claims; provided,
however, that Consignee may participate in the defense at its own expense.
c. Any use or Insertion by Consignor in the consignment products
of artwork, copyrighted materials, trademarks or any other intellectual property
created or owned by Consignee must be expressly approved by Consignee. Such
artwork, copyrighted materials, trademarks or other intellectual property shall
remain the exclusive property of Consignee. Its affiliates, subsidiaries or
assigns. Use of the materials by Consignor for any other purpose is expressly
prohibited.
10. CONSIGNOR-CONSIGNEE RELATIONSHIP. The parties do not intend to form a
partnership or joint venture, principal-agent, employer-employee, or any other
relationship other than that of consignor-consignee, and, where appropriate,
licensor-licensee. It is fully understood that each party will exercise full
power and authority, except for as specifically provided otherwise in writing
and signed by both parties, to select the means, method and manner of performing
all obligations required under this Agreement. Except as provided herein,
neither party
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will have any right or authority and will not attempt to enter into any contract
or commitment, or incur any debt or liability of any nature in the name of or on
behalf of the other party.
11. TERM; TERMINATION. The term of this Agreement shall commence on the
Effective Date, and shall continue for one year, subject to automatic annual
renewal unless terminated by either party upon advance written notice to the
other. Termination shall not effect the parties respective outstanding
obligations.
Upon termination, the parties will wind up their consignment relationship by
conducting an account reconciliation to reach a final settlement. In the event
Consignee's records reflect a debit balance with Consignor (defined as any
amount owned by Consignor to Consignee), Consignee may (i) hold the goods as
collateral until Consignor makes payment to Consignee; or (ii) if Consignee
elects to purchase the remaining consignment inventory, deduct the debit balance
amount from the amount payable to Consignor. Notwithstanding the foregoing, upon
termination of this Agreement, Consignee may, at its option, (i) purchase the
remaining consignment inventory (and negotiate in good faith for obtaining price
protection), or (ii) return all or some of the product to Consignor at
Consignee's expense.
12. ASSIGNMENT. Neither party may assign this Agreement without first
obtaining the written consent of the other party. Provided, however, that a
party may assign this Agreement, without the consent of the other party, to (a)
a purchaser of all or substantially all of the assigning party's assets or a
majority or controlling interest in the assigning party's voting stock, provided
that the purchaser's net worth at the time of purchase is equal to or greater
than that of the assigning party, and further provided that the purchaser is not
a competitor of the other party to this Agreement; or (b) to a present or future
subsidiary or affiliate of the assigning party.
13. GOVERNING LAW. This Agreement shall be governed and controlled in all
respects by the laws of the State of Minnesota, excluding its conflict of law
rules. Consignor consents and submits to the exclusive jurisdiction of the state
and federal district courts located in Minneapolis, Minnesota.
14. ENTIRE AGREEMENT. This consignment agreement, and the accompanying
exhibits, contains all the terms and conditions with respect to the consignment
of the goods named herein. No modification of these terms and conditions shall
be of any forces unless such modification is reduced to writing and signed by
the undersigned Consignor and Consignee. However, the parties may from time to
time amend the description of products and Agreed Cost terms contained on
Exhibit A, without necessarily reducing the same to a writing signed by both
parties.
CONSIGNOR: NETGEAR. Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO
Date: 3/7/2002
CONSIGNEE: BEST BUY CO., INC., AND Its affiliates and subsidiaries
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Buyer
Date: 3/4/02
Page 3
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
CONSIGNMENT AGREEMENT DATE January 1, 2002, between Best Buy Co., Inc., its
affiliates and subsidiaries ("Consignee") and Netgear, Inc. ("Consigner").
EXHIBIT A
To Consignment Agreement
Revised August 27, 2002
Description of Consignment Products
MA 101 - Wireless USB Adaptor
MA 401 - Wireless PC Card
MR314 - Wireless Router w/4 - Port Switch
FVS318 - Firewall Router w/8 - Port
CONSIGNOR: Netgear, Inc. CONSIGNEE: BEST BUY CO., INC
And its affiliates and subsidiaries
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: [ILLEGIBLE]
---------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: [ILLEGIBLE]
Title: Chief Financial Officer Title: Business Team Manager
Date: August 27, 2002 Date: 9/12/02
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT A TO CONSIGNMENT AGREEMENT
DESCRIPTION OF CONSIGNMENT PRODUCTS AGREED COST
----------------------------------------------------------------------------
MA101 - Wireless USB Adapter $ [ * ] /Unit
MA401 - Wireless PC Card $ [ * ] /Unit
MR314 - Wireless Router w/4 - Port Switch $ [ * ] /Unit
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