DISTRIBUTION AGREEMENT THIS DISTRIBUTION AGREEMENT ("Agreement"), is entered into this 15th day of October, 1998, by and between INGRAM MICRO INC. ("Ingram"), a Delaware corporation, having its principal place of business at 1600 E. St. Andrew Place, Santa Ana, California 92705, and RED HAT SOFTWARE ("Vendor"), a DELAWARE corporation, having, its principal place of business at 4201 RESEARCH COMMONS, SUITE 100, RESEARCH TRIANGLE PARK, NORTH CAROLINA 27709. The parties desire to and hereby do, enter into a distributor/supplier relationship, the governing terms and mutual promises of which are set out in this Agreement. 1. DISTRIBUTION RIGHTS 1.1 TERRITORY. Vendor grants to Ingram, including its affiliates for resale, and Ingram accepts, a [CONFIDENTIAL TREATMENT REQUESTED]**. All computer Products produced and/or offered by Vendor ("Product") during the term of this Agreement shall be distributed worldwide. Ingram shall have the right to purchase, sell and ship to any reseller within the territory or to Ingram's affiliate, or at Vendor's option Ingram's affiliate may purchase direct from Vendor. 1.2 PRODUCT Vendor agrees to make available and to sell to Ingram such Product as Ingram shall order from Vendor at the prices and subject to the terms set forth in this Agreement. Ingram shall not be required to purchase any minimum amount or quantity of the Product. 2. TERM AND TERMINATION 2.1 TERM The initial term of this Agreement is one (1) year. Thereafter the Agreement will automatically renew for successive one (1) year terms, unless it is earlier terminated. 2.2 TERMINATION (a) Either party may terminate this Agreement, with or without cause by giving thirty (30) days written notice to the other party. (b) Either party may immediately terminate this Agreement with written notice if the other party. (i) materially breaches any term of this Agreement and such breach continues for thirty (30) business days after written notification thereof; or (ii) ceases to conduct business in the normal course, becomes insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or avails itself of or becomes subject to any proceeding, under any Bankruptcy Act or any other federal or state statute relating to insolvency or the protection of rights of creditors, or - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. (iii) attempts to assign or otherwise transfer its rights hereunder IN VIOLATION OF THE TERMS AND CONDITIONS OF THIS AGREEMENT. 3. INGRAM OBLIGATIONS PRODUCT AVAILABILITY Ingram will list Product in its catalog(s) as appropriate and endeavor to mark such Product available to customers. 3.2 ADVERTISING Ingram will advertise and/or promote Product in a commercially reasonable manner and will transmit as reasonably necessary Product information and promotional materials to its customers. 3.3 SUPPORT Ingram will make its facilities reasonably available for Vendor and will assist in Product training and support. Ingram will provide reasonable, general Product technical assistance to its customers, and will direct all other technical issues directly to Vendor. 3.4 ADMINISTRATION (a) Upon request, Ingram will furnish Vendor with a valid tax exemption certificate. (b) Ingram will provide Vendor standard sales-out and inventory reports via its electronic Bulletin Board System. NON-STANDARD "SALES OUT" INFORMATION SHALL BE PROVIDED BY INGRAM SUBJECT TO A SEPARATE POINT OF SALE REPORT LICENSE AGREEMENT, A COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT G. (c) [CONFIDENTIAL TREATMENT REQUESTED]**. 4. VENDOR OBLIGATIONS 4.1 SHIPPING/EXPORT (a) Vendor shall ship Product pursuant to Ingram purchase order(s) ("P.O."). Product shall be shipped F.O.B. Ingram's designated warehouse with risk of loss or damage to pass to Ingram upon delivery to the warehouse specified in Ingram's P.O. (b) Ingram requires concurrent with the execution of this Agreement Export Administration Regulations product classification and supporting documentation: Certificate of Origin (General Use and/or NAFTA), Export Commodity Control Number's; (ECCN's), General License and/or Individual Validated License information and Schedule "B"/Harmonized Numbers. This applies when distribution rights granted under Section 1.1 are outside the United States for the initial Product/s and when additions or changes to these Products occurs. 4.2 INVOICING For each Product shipment to Ingram, Vendor shall issue to Ingram an invoice showing Ingram's order number, the Product part number, description, price and any discount. [CONFIDENTIAL TREATMENT REQUESTED]**, Vendor shall provide Ingram with a current statement of account, - 2 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. listing all invoices outstanding and any payments made and credits given since the date of the previous statement. 4.3 PRODUCT AVAILABILITY Vendor agrees to USE COMMERCIALLY REASONABLE EFFORTS TO maintain sufficient Product inventory to fill Ingram's orders. If a shortage of any Product exists, Vendor agrees to allocate its available inventory of such Product to Ingram in proportion to Ingram's percentage of all of Vendor's customer orders for such product during the previous [CONFIDENTIAL TREATMENT REQUESTED]**. 4.4 PRODUCT MARKING Vendor will clearly mark each unit of Product with the Product name and computer compatibility. Such packaging will also bear a machine-readable bar code identifier scannable in standard Uniform Product Code (UPC) format. The bar code must identify the Product as specified by the Uniform Code Council (UCC). The bar code shall fully comply with all conditions regarding standard product labeling set forth in Exhibit B in the then-current Ingram GUIDE TO BAR CODE: THE PRODUCT LABEL. [CONFIDENTIAL TREATMENT REQUESTED]** 4.5 TECHNOTES Vendor will within thirty (30) days of execution of this Agreement sign the CIS/ Manufacture Product Information Library - TechNotes and Content Distribution Agreements as shown in Exhibit C and provide the required product information in the designated template format. 4.6 SUPPORT [CONFIDENTIAL TREATMENT REQUESTED]**. Vendor shall also provide to Ingram, its employees, and its customers reasonable amounts of sales literature, advertising materials, and training and support in Product sales WHEN REASONABLY REQUESTED BY INGRAM. 4.7 NEW PRODUCT Vendor shall endeavor to notify Ingram at least [CONFIDENTIAL TREATMENT REQUESTED]** before the date any new Product is introduced. Vendor shall make such Product available for distribution by Ingram no later than the date it is first offered for sale in the marketplace. 4.8 INSURANCE Vendor shall carry insurance coverage for product liability/completed operations [CONFIDENTIAL TREATMENT REQUESTED]**. [CONFIDENTIAL TREATMENT REQUESTED]** 4.9 WARRANTIES/CERTIFICATION (a)[CONFIDENTIAL TREATMENT REQUESTED] (b) WARRANTY Vendor hereby represents and warrants that [CONFIDENTIAL TREATMENT REQUESTED]**, any Product offered for distribution does not contain any obscene, defamatory or libelous matter or violate any right of publicity or privacy - 3 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. (c) END-USER WARRANTY Vendor shall provide a warranty statement with Product for end user benefit. This warranty shall commence upon Product delivery to end-user. (d) MILLENNIUM COMPLIANCE WARRANTY INTENTIONALLY DELETED. (e) EU WARRANTY Vendor further warrants TO THE BEST OF VENDOR'S KNOWLEDGE, and represents for Products distributed to the European Union ("EU") that the Products will be accepted under all EU directives, regulations and EU country's legislation. (f) MADE IN AMERICA CERTIFICATION Vendor by the execution of this Agreement certifies that it will not label any of its products as being "Made in America," "Made in U.S.A.," or with similar wording unless all components or elements of such Product is in fact made in the United States of America. Vendor further agrees to defend, indemnify and hold harmless from and against any and all claims, demands, liabilities, penalties, damages, judgments or expenses (including attorney's fees and court costs) arising out of or resulting in any way from Product that does not conform to the Certification. 5. PRICING 5.1 INGRAM PRICING The suggested retail price and any Ingram discount for Product is set out in Exhibit D. Vendor may modify Exhibit D with a minimum of [CONFIDENTIAL TREATMENT REQUESTED]** advance written notice to Ingram. All Ingram orders for Product will be billed at the price in effect when the order is placed. Ingram shall have sole discretion as to selling price of Product to its customers. 5.2 [CONFIDENTIAL TREATMENT REQUESTED]**. 5.3 [CONFIDENTIAL TREATMENT REQUESTED]**. 5.4 [CONFIDENTIAL TREATMENT REQUESTED]**. 5.5 PAYMENT TERMS Ingram's payment terms shall be [CONFIDENTIAL TREATMENT REQUESTED]**. Payment shall be deemed made on the payment postmark date. 5.6 [CONFIDENTIAL TREATMENT REQUESTED]**. 6. MARKETING 6.1 TRADEMARKS Ingram may advertise and promote the Product and/or Vendor, and may thereby use VENDOR'S trademarks, service marks and trade names. INGRAM'S USE OF VENDOR'S TRADEMARKS, SERVICE MARKS AND TRADE NAMES SHALL BE PERFORMED IN ACCORDANCE WITH THE REASONABLE USE GUIDELINES OF VENDOR, A COPY OF WHICH WILL BE PROVIDED HERETO AS EXHIBIT F. Neither party shall acquire any rights in the trademarks, service marks or trade names of the other. 6.2 ADVERTISING Vendor agrees to cooperate in Ingram's or Ingram's customers' and promotion of Product and hereby grants Ingram a cooperative advertising allowance of [CONFIDENTIAL - 4 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. TREATMENT REQUESTED]** of Product invoice amount for such advertising featuring Product and/or Vendor. Ingram shall submit advertising to Vendor for review and approval prior to any initial release, and Vendor shall not unreasonably withhold or delay such approval. [CONFIDENTIAL TREATMENT REQUESTED]**. 6.3 PROGRAMS (a) Ingram may offer marketing programs to Vendor including but not limited to launch programs and reseller pass through opportunities. If Vendor elects to participate, Vendor agrees to pay such funds as may be required for this purpose. (b) Vendor may be asked or prepay all marketing activities until a mutually agrees upon sell through rate is achieved. 6.4 SUPPORT PRODUCT Vendor shall consign a reasonable amount of demonstration Product to aid Ingram in its support and promotion of Product. All such consigned Product will be returned to Vendor upon request. 7. RETURNS 7.1 STOCK BALANCING Notwithstanding anything herein to the contrary, Ingram may return throughout the term any Products PURCHASED WITHIN [CONFIDENTIAL TREATMENT REQUESTED]** OF SALE which are in their original packaging to Vendor for full credit of the Products' purchase price. [CONFIDENTIAL TREATMENT REQUESTED]**. 7.2 POST-TERM/TERMINATION For [CONFIDENTIAL TREATMENT REQUESTED]** after the expiration or earlier termination of this Agreement, Ingram may return to Vendor any Product for credit against outstanding invoices, or if there are no outstanding invoices for a cash refund. Any credit or refund due Ingram for returned Product shall be equal to [CONFIDENTIAL TREATMENT REQUESTED]**. 7.3 PRODUCT DISCONTINUATION Vendor shall give Ingram [CONFIDENTIAL TREATMENT REQUESTED]** advance written notice of Product discontinuation. Ingram may return all such Product to Vendor for full credit of Product purchase price [CONFIDENTIAL TREATMENT REQUESTED]**. 7.4 DEFECTIVE PRODUCT (a) Ingram may return any Product to Vendor that Ingram or its customer finds defective. [CONFIDENTIAL TREATMENT REQUESTED]**. (b) If any Product is recalled by Vendor because of defects, revisions or upgrades, Ingram will, at Vendor's request, provide reasonable assistance with the recall. Vendor will pay Ingram's REASONABLE expenses in connection with such recall. - 5 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 8. [CONFIDENTIAL TREATMENT REQUESTED]** 8.1 [CONFIDENTIAL TREATMENT REQUESTED]** 8.2 [CONFDIENTIAL TREATMENT REQUESTED]** 8.3 [CONFIDENTIAL TREATMENT REQUESTED]** 8.4 [CONFIDENTIAL TREATMENT REQUESTED]**. 8.5 [CONFIDENTIAL TREATMENT REQUESTED]** 8.6 [CONFIDENTIAL TREATMENT REQUESTED]** 8.7 [CONFIDENTIAL TREATMENT REQUESTED]** 8.8 LIMITATION OF LIABILITY NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOST PROFITS OF BUSINESS, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), AND WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION IS IN NO WAY MEANT TO LIMIT VENDORS LIABILITY FOR PERSONAL INJURY OR DEATH AS A RESULT OF A DEFECT IN ANY PRODUCT IN THOSE JURISDICTIONS WHERE THE LAW DOES NOT ALLOW THIS LIMITATION. 9. COMPLIANCE WITH FEDERAL LAWS AND REGULATIONS 9.1 Vendor shall comply with all State, Federal and Local laws, rules and regulations 10. GOVERNMENT PROGRAM 10.1 PARTNERSHIP AMERICA Vendor may, at its sole option, participate in Ingram's government reseller program in which case the provisions of Exhibit E, Partnership America, shall apply. A draft copy is provided solely for your information and review. 11. GENERAL PROVISIONS - 6 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 11.1 NOTICES Any notice which either party may desire to give the other party must be in writing and may be given by (i) personal delivery to an officer of the party, (ii) by mailing the same by registered or certified mail, return receipt requested, OR BY NATIONALLY RECOGNIZED EXPRESS COURIER service to the party to whom the party is directed at the address of such party as set forth at the beginning of this Agreement, or such other address as the parties may hereinafter designate, and (iii) by facsimile or telex communication subsequently to be confirmed in writing, pursuant to item (ii) herein. 11.2 GOVERNING LAW This Agreement shall be construed and enforced in accordance with the laws of the State of [CONFIDENTIAL TREATMENT REQUESTED]**, except that body of law concerning conflicts of law. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. 11.3 COOPERATION Each party agrees to execute and deliver such further documents and to cooperate as may be necessary to implement and give effect to the provisions contained herein. 11.4 FORCE MAJEURE Neither party shall be liable to the other for any delay or failure to perform which results from causes outside its reasonable control. 11.5 ATTORNEYS FEES In the event there is any dispute concerning the terms of this Agreement or the performance of any party hereto pursuant to the terms of this Agreement, and any party hereto retains counsel for the purpose of enforcing any of the provisions of this Agreement or asserting the terms of this Agreement in defense of any suit filed a-against said party, each party shall be solely responsible for its own costs and attorney's fees incurred in connection with the dispute irrespective of whether or not a lawsuit is actually commenced or prosecuted to conclusion. 11.6 EXPORT REGULATIONS Ingram agrees by the purchase of Products to conform to, and abide by, the export laws and regulations of the United States, including but not limited to, the Export Administration Act of 1979 as amended and its implementing regulations. Ingram shall include a statement in it's standard sales terms and conditions that any shipment of Product outside the United States will require a valid export license. Ingram further agrees to distribute Product in accordance with the territory as defined in Section1.1. Whenever a EU country is specified as Territory under Section 1. 1, Territory shall include all EU countries. 12. AGREEMENT 12.1 COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12.2 SECTION HEADINGS Section headings in this Agreement are for convenience only, and shall not be used in construing the Agreement. 12.3 INCORPORATION OF ALL EXHIBITS Each and every exhibit referred to hereinabove and attached -hereto is hereby incorporated herein by reference as if set forth herein in full. - 7 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 12.4 SEVERABILITY A judicial determination that any provision of this Agreement is invalid in whole or in part shall not affect the enforceability of those provisions found to be valid. 12.5 NO IMPLIED WAIVERS If either party fails to require performance of any duty hereunder by the other party, such failure shall not affect its right to-require performance of that or any other duty thereafter. The waiver by either party of a breach of any provision of this Agreement shall not be a waiver of the provision itself or a waiver of any breach thereafter, or a waiver of any other provision herein. 12.6 BINDING EFFECT/ASSIGNMENT This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective representatives, successors and permitted assigns. This Agreement shall not be assignable by Vendor, without the express written consent of Ingram, which consent shall not be unreasonably withheld, including to a Person in which it has merged or which has otherwise succeeded to all or substantially all of such party's business and assets to which this Agreement pertains and which has assumed in writing or by operation of law its obligations under this Agreement. Any attempted assignment in violation of this provision will be void. NOTWITHSTANDING THE OTHER PROVISIONS OF THIS SECTION, IN THE EVENT THAT EITHER PARTY IS MERGED WITH OR CONSOLIDATED INTO ANY OTHER ENTITY, OR IN THE EVENT THAT SUBSTANTIALLY ALL OF THE ASSETS OF EITHER PARTY ARE SOLD OR OTHERWISE TRANSFERRED TO ANY OTHER ENTITY, THE PROVISIONS OF THIS AGREEMENT WILL BE BINDING UPON, AND INURE TO THE BENEFIT OF, SUCH OTHER ENTITY. 12.7 SURVIVAL Sections 5.5 (Payment Terms), [CONFIDENTIAL TREATMENT REQUESTED]** 7.2 (Post-Term Termination) and [CONFIDENTIAL TREATMENT REQUESTED]** shall survive the expiration or earlier termination of this Agreement. 12.8 ENTIRETY This Agreement constitutes the entire agreement between the parties regarding its subject matter. This Agreement supersedes any and all previous proposals, representations or statements, oral or written. Any previous agreements between the parties pertaining to the subject matter of this Agreement are expressly terminated. The terms and conditions of each party's purchase orders, invoices, acknowledgments/confirmations or similar documents shall not apply to any order under this Agreement, and any such terms and conditions on any such document are objected to without need of further notice or objection. Any modifications to this Agreement must be in writing and signed by authorized representatives of both parties. 12.9 AUTHORIZED REPRESENTATIVES Either party's authorized representative for execution of this Agreement or any amendment hereto shall be president, a partner, or a duly authorized vice president of their respective party. The parties executing this Agreement warrant that they have the requisite authority to do so. IN WITNESS WHEREOF, the parties hereunto have executed this Agreement. "Ingram" "Vendor" - 8 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Ingram Micro Inc. Red Hat Software 1600 E. St. Andrew Place 4201 Research Commons, Suite 100 Santa Ana, California 92705 Research Triangle Park, North Carolina 27709 By: /s/ Michael Terrell By: /s/ Paul Mcnamara ---------------------------- --------------------------------------- Name: Michael Terrell Name: Paul Mcnamara ---------------------------- --------------------------------------- Title: Vice President Purchasing Title: Vice President ---------------------------- --------------------------------------- Date: November 11, 1998 Date: November 5, 1998 ---------------------------- --------------------------------------- *AGREEMENT MUST BE SIGNED BY PRESIDENT OR BY A DULY AUTHORIZED VICE PRESIDENT OR PARTNER. - 9 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXHIBITS: A - Vendor Routing Guide (if applicable) B - Guide to Bar Code: The Product Label C - TechNotes D - Product Price List E - Partnership America F - Vendor Trademark Guidelines G - Point of Sale Report License Agreement - 10 - - -------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Distribution Agreement - Ingram Micro Inc. and Red Hat Software
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