CONFIDENTIAL TREATMENT REQUESTED [HANDSPRING LOGO] Retail Distribution Agreement -------------------------------------------------------------------------------- This agreement ("Agreement") is entered into between Handspring, Inc. ("Handspring") a California corporation having offices at 189 Bernardo Ave. Mountain View, CA 94043 and CompUSA, Inc., ("Reseller") a Delaware corporation having offices at 17951 North Dallas Parkway, Dallas, TX 75240. Whereas, Handspring sells a line of handheld computers and associated accessories; Whereas, Reseller is in the business of reselling computer products; Whereas, Handspring desires to engage the Reseller for the purposes of marketing and selling Handspring's handheld computers and associated accessories in the United States; and Therefore, in consideration of the following conditions set for the in this Agreement, the parties agree to the following. 1. DEFINITIONS "Customer" means an end user of a Product. "Limited Warranty Statement" means Handspring's then-current warranty from Handspring to Customers. "Products" means the products in Handspring's then-current reseller Product List, a current copy of which is attached as Exhibit A. A Product may include both hardware and software components. Handspring may add to, delete from, or otherwise modify the Products on the Product List at any time. "Territory" means the United States of America. 2. PRODUCT TERMS 2.1 APPOINTMENT. Handspring hereby appoints Reseller, and Reseller accepts such appointment, to act as a non-exclusive reseller of Products only to Customers located in the Territory. Sale of Products to other resellers or Reseller's affiliates is strictly prohibited. Reseller will only sell the Products in face-to-face transactions from physical store outlets located in the Territory, and will not market or sell the Products using any Internet site or mail order catalog without specific written authorization by Handspring. 2.2 PRICES. The prices paid by Reseller to Handspring for Products shall initially be as set forth in Exhibit A. Handspring shall have the right, at any time, to change, alter, or amend Product prices upon written notice. Reseller is eligible to receive price protection in accordance with the guidelines attached as Exhibit C. Prices are exclusive of all taxes, insurance, and shipping and handling charges, which are Reseller's sole responsibility. 3. ORDERING AND PAYMENT 3.1 ORDERS. Orders shall be in writing and be subject to acceptance by Handspring. The terms and conditions of each order shall be as provided by this Agreement, and the provisions of either party's form of purchase order, acknowledgment or other business forms will not apply to any order notwithstanding the other party's acknowledgment or acceptance of such form. 3.2 SHIPMENT. Shipment will be F.O.B. Handspring's specified warehouse ("Delivery Point"), at which time title (excluding any software components of Products) and risk of loss will pass to Reseller. All freight, insurance and other shipping expenses from Delivery Point, as well as any expenses related to Reseller's special packing requests, will be borne by Reseller unless otherwise agreed to in writing by Handspring. 1 2 3.3 PAYMENT. Subject to compliance with Handspring's credit requirements, payments on orders will be due and payable in full * days from the invoice date. Reseller shall pay monthly service charges of 1% per month for any past due amounts. Handspring may in its sole discretion change Reseller's credit terms and/or require C.O.D. payment for any shipments. 4. RETURNS 4.1 DEFECTIVE PRODUCT RETURNS. Returns of defective Products will be processed through return processing centers and consolidated for shipment weekly or biweekly to Handspring by Reseller. Returns of defective Products will be paid for by Handspring when Handspring authorized carriers are used. Return shipment charges via unauthorized carriers and all customs or broker's fees are the responsibility of Reseller. Handspring reserves the right to charge-back to Reseller shipping charges incurred on those Products which were returned as defective and no fault was found. Incomplete Product returns will be accepted less the value of the missing components. Under no circumstances shall the total defective returns of any specific Product model number exceed * % of total purchases for that model number in the ninety (90) days prior to the return request. 4.2 STOCK BALANCES. Upon written approval by Handspring, Reseller may return current, undamaged Products which are unopened and in their original packaging and original master packs to Handspring for full credit, less any discounts, marketing considerations or credits previously received. Under no circumstances shall the total stock balance return for a specific Product exceed * % of total number of purchases for that Product model number in the ninety (90) days prior to the return request. All freight charges for stock balanced Product is paid by Reseller. Eligible Products returned by Reseller to Handspring that are not approved in advance will be subject to a 15% handling fee. 5. RESELLER'S OBLIGATIONS 5.1 MARKETING DEVELOPMENT. Reseller will aggressively market and advertise the Products. So long as Reseller in compliance with this Agreement, Reseller may participate in Handspring's Market Development Fund program ("MDF Program"). A copy of the current MDF Program Guidelines is attached as Exhibit B. 5.2 INVENTORY/ SALES INFORMATION. Reseller will be required to provide sell through and inventory information for all inventory locations via an electronic link such as EDI or other standard data transfer and exchange method. The method must be agreed to in advance by Reseller and Handspring. 5.3 RESELLER COVENANTS. Reseller will: (i) conduct business in a manner that reflects favorably at all times on Products and the good name, goodwill and reputation of Handspring; (ii) avoid deceptive, misleading or unethical practices that are or might be detrimental to Handspring or Handspring Products; (iii) make no false or misleading representations with regard to Handspring or Handspring Products; (iv) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Handspring or Handspring Products; and (v) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of Handspring Products that are inconsistent with the literature distributed by Handspring. 5.4 USE OF TRADEMARKS AND PROPRIETARY NOTICES. During the term of this Agreement, Reseller may use the trademarks, trade names, logos and designations used by Handspring for Handspring Products solely in connection with Reseller's advertisement and promotion of Handspring Products, in accordance with Handspring's then-current trademark usage policies. Reseller shall not remove or destroy any copyright notices, trademarks or other proprietary markings on the Products, software, documentation or other materials related to the Products. 6. TERM AND TERMINATION 6.1 TERM. This Agreement shall commence on the Effective Date and continue for twelve (12) months thereafter unless terminated earlier as provided herein. 6.2 TERMINATION WITHOUT CAUSE. Reseller or Handspring may terminate this Agreement without cause, at any time, by written notice to the other party not less than thirty (30) days prior to the effective date of termination. All unfilled orders pending at the time of the date of such notice of termination shall be deemed canceled, and Handspring and Reseller hereby waive all claims against the other in connection with the cancellation of such orders. * Confidential treatment has been requested for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission. Such portions are omitted from this filing and are filed separately with the Securities and Exchange Commission. 2 3 6.3 TERMINATION FOR BREACH. Handspring may terminate this Agreement, for cause, by written notice to Reseller not less than ten (10) days prior to the effective date of such notice in the event that: (i) Reseller fails to pay past due invoices within thirty (30) days after notice that invoices are past due; (ii) Reseller fails to resolve and remove from Handspring unauthorized debits after a remedy period outlined in section seven, subsection six: (iii) Reseller violates any other material provision of this Agreement; or (iv) control of Reseller is acquired, directly or indirectly, by a third party, or Reseller is merged with a third party. Upon giving its notice of termination, Handspring may alter its terms of sale, including credit terms, and take such other action as may be consistent with the termination of Reseller as an authorized Handspring Reseller. 6.4 TERMINATION FOR INSOLVENCY. At the option of Handspring or Reseller, this Agreement shall terminate immediately if: (i) a receiver is appointed for the other party or its property; (ii) the other party becomes insolvent or unable to pay its debts as they mature or ceases to pay its debts as they mature in the ordinary course of business, or makes an assignment for the benefit of creditors; (iii) any proceedings are commenced by or for the other party under any bankruptcy, insolvency or debtors' relief law; (iv) any proceedings are commenced against the other party under any bankruptcy insolvency or debtor's relief law, and such proceedings have not been vacated or set aside within sixty (60) days from the date of commencement thereof; or (v) the other party commences to dissolve under applicable corporate law statutes. 6.5 TERMINATION/EXPIRATION ACCOUNTING. All amounts payable by Reseller to Handspring shall survive termination and become immediately due and payable. In addition, Handspring shall have the right to repurchase unsold Products in Reseller's inventory. Within ten (10) days following termination, Reseller shall furnish Handspring with an inventory of unsold Products. Within ten (10) days after receipt of such inventory, Handspring shall notify Reseller in writing whether or not Handspring intends to repurchase from Reseller all or part of such inventory at the original invoice price (less discounts, price protection or other credits previously granted). Handspring shall pay all transportation and other costs connected with shipping such Products to Handspring. 7. WARRANTY DISCLAIMER 7.1 CUSTOMER WARRANTY. Handspring provides a Limited Warranty Statement to Customers. Reseller will make available to Customers a copy of the Limited Warranty Statement and will not make any representations or statements inconsistent with such Limited Warranty Statement. 7.2 EXPRESS DISCLAIMER. Handspring MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE Products, EXCEPT AS SET FORTH ABOVE. ALL IMPLIED WARRANTIES AND CONDITIONS, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT, ARE HEREBY DISCLAIMED. 8. LIMITATION OF LIABILITY THE LIABILITY OF Handspring AND ITS SUPPLIERS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUPPLY OF Products HEREUNDER, SHALL BE LIMITED TO THE ACTUAL AMOUNTS PAID BY RESELLER TO Handspring FOR THE Products GIVING RISE TO SUCH DAMAGES, AND SHALL IN NO EVENT INCLUDE LOSS OF PROFITS, COST OF PROCURING SUBSTITUTE GOODS OR SERVICES, OR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF Handspring OR ITS SUPPLIER IS AWARE OF THE POSSIBILITY OF SUCH DAMAGES. 9. GENERAL 9.1 ASSIGNMENT. Neither party may assign, delegate, or transfer the Agreement, or any of its rights or duties hereunder, without the prior written consent of the other party. Any attempted assignment or delegation in violation of this section shall be void. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties, their successors and permitted assigns. Notwithstanding the foregoing, Handspring may assign its rights and duties hereunder in connection with a merger, consolidation, spin-off, corporate reorganization, acquisition, or sale of all or substantially all the assets of Handspring. 9.2 GOVERNING LAW. This Agreement shall be governed by the laws of the State of California (other than its conflicts of law principles), excluding the United Nations Convention on Contracts for the International Sale of Goods. The parties hereby consent to the exclusive jurisdiction of and venue in the federal and/or state courts located in Santa Clara County, California. 9.3 INDEPENDENT CONTRACTORS. In performing their respective duties under this Agreement, each of the parties will be operating as an independent contractor. Nothing contained herein will in any way constitute 3 4 any association, partnership, or joint venture between the parties hereto, or be construed to evidence the intention of the parties to establish any such relationship. Neither party will have the power to bind the other party or incur obligations on the other party's behalf without the other party's prior written consent. 9.4 MODIFICATION AND WAIVER. No modification to this Agreement, nor any waiver of any rights, will be effective unless assented to in writing by the party to be charged, and the waiver of any breach or default shall not constitute a waiver of any other right hereunder or any subsequent breach or default. 9.5 NOTICES. Any required or permitted notices hereunder must be given in writing at the address of each party set forth below, or to such other address as either party may substitute by written notice to the other in the manner contemplated herein, by one of the following methods: hand delivery; registered, express, or certified mail, return receipt requested, postage prepaid; nationally-recognized private express courier; or facsimile. Notices will be deemed given on the date received. 9.6 SEVERABILITY. If for any reason any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect. 9.7 LIMITATION OF ACTION. Any legal action arising out of this Agreement shall be barred unless commenced within one (1) year of the act or omission giving rise to the action. Such limitation shall not apply to any actions asserted against Reseller by Handspring arising from any delinquencies in payment for Products. 9.8 ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto constitute the entire and exclusive agreement between the parties hereto with respect to the subject matter hereof and supersede any prior agreements between the parties with respect to such subject matter. In witness whereof, the parties have caused this Agreement to be executed by their respective authorized representatives as of the Effective Date. Reseller Handspring /s/ Douglas S. Lane, /s/ Greg Woock, VP Sales, Buyer II 3/2/00 N. America 3/13/00 ------------------------------- -------------------------------- Name and Title Date Name and Title Date 4 5 [HANDSPRING LOGO] Price List DATED 1/24/00 Exhibit A HANDHELD COMPUTERS
Retail Distribution Agreement - Handspring Inc. and CompUSA Inc.
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