EXHIBIT 10.9
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.
DISTRIBUTION AGREEMENT BETWEEN
TECH DATA CORPORATION AND
TRANCELL SYSTEMS
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.
DISTRIBUTION AGREEMENT
THIS AGREEMENT, dated as of this _16__ day of _December___________ 19_96_ (the "Effective Date"), is between TECH DATA CORPORATION, a Florida corporation ("Tech Data"), with its principal corporate address at 5350 Tech Data Drive, Clearwater, Florida 34620 and TRANCELL SYSTEMS, a California corporation ("Trancell"), with its principal corporate address at 3180 De La Cruz Blvd., Suite 200, Santa Clara, California 95054.
A. Tech Data desires to purchase certain Products from Trancell from time to time and Trancell desires to sell certain Products to Tech Data in accordance with the terms and provisions set forth in this Agreement.
B. Trancell desires to appoint Tech Data as its non-exclusive distributor to market Products within the territory defined below and Tech Data accepts such appointment on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the Recitals, the mutual covenants contained in this Agreement and other good and valuable consideration, Tech Data and Trancell hereby agree as follows:
ARTICLE I. DEFINITIONS, APPOINTMENT AND TERM OF AGREEMENT
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1.1 Definitions. The following definitions shall apply to this Agreement.
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(a) "Customers" of Tech Data shall include dealers, resellers, value
added resellers, mail order resellers and other entities that acquire
the Products from Tech Data.
(b) "DOA" shall mean Product, or any portion thereof, which fails to
operate properly on initial "bum in", boot, or use, as applicable.
(c) "Documentation" shall mean user manuals, training materials,
product descriptions and specifications, brochures, technical manuals,
license agreements, supporting materials and other printed information
relating to the Products, whether distributed in print, electronic, or
video format.
(d) "End Users" shall mean the final retail purchasers or licensees
who have acquired Products for their own use and not for resale,
remarketing or redistribution.
(e) "Non-Saleable Products" shall mean any Product that has been
returned to Tech Data by its Customers that has had the outside shrink
wrapping or other packaging seal broken or any components of the
original package are missing, damaged or modified.
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.
(f) "Products" shall mean, individually or collectively as
appropriate, hardware, licensed software, Documentation, supplies,
accessories, and other commodities related to any of the foregoing
produced by Trancell.
(g) "Services" means any warranty, maintenance, advertising, marketing
or technical support and any other services performed or to be
performed by Trancell.
(h) "Territory" shall mean worldwide.
1.2 Term of Agreement. The term of this Agreement shall commence on the
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Effective Date and, unless terminated by either party as set forth in this
Agreement, shall remain in full force and effect for a term of one (1)
year, and will be automatically renewed for successive one (1) year terms
unless prior written notification of termination is delivered by one of the
parties in accordance with the notice provision of this Agreement.
1.3 Appointment as Distributor. Trancell hereby grants to Tech Data the non-
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exclusive right to distribute Products during the term of this Agreement
within the Territory. This Agreement does not grant Trancell or Tech Data
an exclusive right to purchase or sell Products and shall not prevent
either party from developing or acquiring other vendors or customers or
competing Products. Tech Data will use commercially reasonable efforts to
promote sales of the Products. Trancell agrees that Tech Data may obtain
Products in accordance with this Agreement for the benefit of subsidiaries
of Tech Data. Wholly owned subsidiaries of Tech Data shall be entitled to
order Products directly from Trancell pursuant to this Agreement.
ARTICLE II. PURCHASE ORDERS
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2.1 Issuance and Acceptance of Purchase Order.
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(a) This Agreement shall not obligate Tech Data to purchase any
Products or services except as specifically set forth in a written
purchase order.
(b) Tech Data may issue to Trancell one or more purchase orders
identifying the Products Tech Data desires to purchase from Trancell.
The terms and provisions of this Agreement shall govern all purchase
orders except that purchase order may include other terms and
provisions which are consistent with the terms and provisions of this
Agreement, or which are mutually agreed to by Tech Data and Trancell.
Purchase orders will be placed by Tech Data by fax or electronically
(c) A purchase order shall be deemed accepted by Trancell unless
Trancell notifies Tech Data in writing within five (5) days after
receiving the purchase order that Trancell does not accept the
purchase order.
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission. 2.2 Purchase Order Alterations or Cancellations. Prior to shipment of
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Products, Trancell shall accept alterations or cancellation to a purchase
order in order to: (i) change a location for delivery, (ii) modify the
quantity or type of Products to be delivered or (iii) correct typographical
or clerical errors.
2.3 Evaluation or Demonstration Purchase Orders. Trancell shall provide to
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Tech Data a reasonable number of demonstration or evaluation products at no
2.4 Product Shortages. If for any reason Trancell's production is not on
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schedule, Trancell may allocate available inventory to Tech Data and make
shipments based upon a fair and reasonable percentage allocation among
Trancell's customers. Such allocations shall not impact the calculation of
performance rebates.
ARTICLE III. DELIVERY AND
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ACCEPTANCE OF PRODUCTS
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3.1 Acceptance of Products. Tech Data shall, after a reasonable time to
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inspect each shipment, accept Product (the "Acceptance Date") if the
Products and all necessary documentation delivered to Tech Data are in
accordance with the purchase order. Any Products not ordered or not
otherwise in accordance with the purchase order, (e.g. mis-shipments,
overshipments) may be returned to Trancell at Trancell's expense (including
without limitation costs of shipment or storage). Trancell shall refund to
Tech Data within ten (10) business days following notice thereof, all
monies paid in respect to such rejected Products. Tech Data shall not be
required to accept partial shipment unless Tech Data agrees prior to
3.2 Title and Risk of Loss. FOB Trancell Shipping Point title and risk of loss
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or damage to Products shall pass to Tech Data at the time that the Products
are shipped by Trancell (i.e., delivered to Common Carrier).
3.3 Transportation of Products. Trancell shall deliver the Products clearly
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marked on the Product package with serial number, product description and
machine readable bar code (employing UPC or other industry standard bar
code) to Tech Data at the location shown and on the delivery date set forth
in the applicable purchase order or as otherwise agreed upon by the
parties. Charges for transportation of the Products shall be paid by
Trancell. Trancell shall use only those common carriers preapproved by
Tech Data or listed in Tech Data's published routing instructions, unless
prior written approval of Tech Data is received.
ARTICLE IV. RETURNS
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4.1 Inventory Adjustment. Trancell agrees to accept return of overstocked
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Products as determined by Tech Data, of not more than [ * * * ]. Shipments
of Product being returned shall be new, unused and in sealed cartons.
Vendor shall credit Tech Data's account in the amount of the price paid by
Tech Data therefor less any price protection credits but not including any
early payment or prepayment discounts (the "Return
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.
Credit"). Tech Data will supply Trancell with an offsetting purchase order
of equal or greater value.
4.2 Defective Products/Dead on Arrival (DOA). Tech Data shall have the right
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to return to Trancell for credit any DOA Product that is returned to Tech
Data within sixty (60) days after the initial delivery date to the End User
and any Product that fails to perform in accordance with Trancell's product
warranty, for credit. Trancell shall bear all costs of shipping and risk
of loss of DOA and in-warranty Products to Trancell's location and back to
Tech Data or Tech Data's Customer. If Trancell delivers defective and DOA
Product of more than [* * * ], Trancell shall [* * * ].
4.3 Obsolete or Outdated Product. Tech Data shall have the right to return for
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full credit, without limitation as to the dollar amount, all Products that
become obsolete or Trancell discontinues or are removed from Trancell's
current price list; provided Tech Data returns such Products within ninety
(90) days after Tech Data receives written notice from Trancell that such
Products are obsolete, superseded by a newer version, discontinued or are
removed from Trancell price list.
4.4 Miscellaneous Returns.
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(a) Bad Box. Tech Data shall return for credit Products which have boxes
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that are or become damaged. Tech Data will place an offsetting
purchase order for equal or greater value.
(b) Non-Saleable. Tech Data may return Non-Saleable Product to Trancell
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for credit. Tech Data will request a Return Material Authorization
Number (RMA) for this return. Tech Data will place an offsetting
purchase order for equal or greater value.
ARTICLE V. PAYMENT TO VENDOR
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5.1 Charges, Prices and Fees for Products. Charges, prices, quantities and
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discounts, if any, for Products shall be determined as set forth in
Schedule 5.1, or as otherwise mutually agreed upon by the parties in
writing, and may be confirmed at the time of order. In no event shall
charges exceed Trancell's then current established charges. Tech Data
shall not be bound by any of Trancell's suggested prices.
5.2 Payment. Except as otherwise set forth in this Agreement, any undisputed
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sum due to Trancell pursuant to this Agreement shall be payable as follows:
[* * * ], net forty-five (45) days after the invoice receipt. Trancell
shall invoice Tech Data no earlier than the applicable shipping date for
the Products covered by such invoice. Products which are shipped from
outside the United States, shall not be invoiced to Tech Data prior to the
Products being placed on a common carrier within the United States for
final delivery to Tech Data. The due date for payment shall be extended
during any time the parties have a bona fide dispute concerning such
payment. Notwithstanding anything herein to the contrary, for the initial
order only, payment shall be made by Tech Data upon resale of
*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.
the Products and Tech Data may return any of the Products delivered under
the initial order for credit.
5.3 Invoices. A "correct" invoice shall contain (i) Trancell's name and
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invoice date, (ii) a reference to the purchase order or other authorizing
document, (iii) separate descriptions, unit prices and quantities of the
Products actually delivered, (iv) credits (if applicable), (v) shipping
charges (if applicable) (vi) name (where applicable), title, phone number
and complete mailing address as to where payment is to be sent, and (vii)
other substantiating documentation or information as may reasonably be
required by Tech Data from time to time.
5.4 Taxes. Tech Data shall be responsible for franchise taxes, sales or use
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taxes or shall provide Trancell with an appropriate exemption certificate.
Trancell shall be responsible for all other taxes, assessments, permits and
fees, however designated which are levied upon this Agreement or the
Products, except for taxes based upon Tech Data's income. No taxes of any
type shall be added to invoices without the prior written approval of Tech
5.5 Fair Pricing and Terms. Trancell represents that the prices charged and
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the terms offered to Tech Data are and will be at least as beneficial to
Tech Data as those charged or offered by Trancell to any of its other
distributors or customers in the channel. If Trancell offers price
discounts, payment discounts, promotional discounts or other special prices
to its other distributors or customers in the channel, Tech Data shall also
be entitled to participate and receive notice of the same no later than
other distributors or customers.
5.6 Price Adjustments:
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(a) Price Increases. Trancell shall have the right to incr
