{"id":42252,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/distributor-agreement-dragon-systems-inc-and-merisel-americas.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"distributor-agreement-dragon-systems-inc-and-merisel-americas","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/distributor-agreement-dragon-systems-inc-and-merisel-americas.html","title":{"rendered":"Distributor Agreement &#8211; Dragon Systems Inc. and Merisel Americas Inc."},"content":{"rendered":"<pre>\n                              DISTRIBUTOR AGREEMENT\n\n      This Distributor Agreement (the \"Agreement\") is made by and between Dragon\nSystems, Inc., a ___________ corporation (\"Supplier\") and Merisel Americas,\nInc., a Delaware corporation (\"Distributor\"). Supplier and Distributor hereby\nagree as follows:\n\n      1.    Distribution Rights. Supplier grants to Distributor the\nnon-exclusive right and license to distribute Supplier's Products to\nDistributor's customers in the U.S. and Canada; provided, that Distributor may\nat any time during the term of this Agreement assign its rights and obligations\nunder this Agreement to one or more of Merisel, Inc., or any of Merisel, Inc.'s\nmajority owned direct or indirect subsidiaries or affiliates (individually, a\n\"Subsidiary\") with respect to the U.S. and Canada, and each Subsidiary shall\nthereafter have the rights and obligations of Distributor hereunder with respect\nto the territory assigned to it as if such Subsidiary had entered into this\nAgreement directly with Supplier. \"Products\" shall include all of Supplier's\nproducts set forth on Exhibit A hereto and any other products manufactured or\nmarketed by Supplier for distribution, during the term of this Agreement and\nintended for sale by resellers. Supplier has provided Distributor a list of all\nother distributors purchasing Products from Supplier as of the date hereof, and\nSupplier shall give Distributor reasonable prior written notice of the\nappointment of any other distributor of any of its Products during the term of\nthis Agreement.\n\n      2.    Price and Payment Terms.\n\n            2.1 Retail Price and Discount. The purchase price payable for any\nProduct ordered by Distributor shall be equal to Supplier's published suggested\nretail price for the Product less a discount of _________ %. Suggested retail\nprices, Distributor and Reseller discount amounts and purchase prices for the\nProducts are set forth on Exhibit A. In the event Supplier wishes to change the\nsuggested retail price of any Product, Supplier shall give Distributor at least\nthirty (30) days' prior written notice of the change, specifying the new\nsuggested retail price, discount amount (determined using the above discount\npercentage) and purchase price payable by Distributor. In the event any new\nProduct is manufactured or marketed by Supplier for distribution during the term\nof the Agreement, Supplier shall notify Distributor in writing of the suggested\nretail price, discount amount (determined using the above discount percentage)\nand purchase price payable by Distributor.\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n            2.2 Price Protection.\n\n            (a) If the purchase price of any Product is increased, Supplier\nshall honor any Distributor purchase orders placed prior to the effective date\nof the increase at the price in effect immediately prior to the time the\nincrease is announced.\n\n            (b) If the purchase price of any Product is decreased, Supplier\nshall grant Distributor a credit in the amount of the price decrease for each\nunit of the Product that is or has been (i) on order or in transit to\nDistributor on the effective date of the price decrease, (ii) in Distributor's\ninventory on the effective date of the decrease, and (iii) in Distributor's\ncustomers inventory on the effective date of the decrease. In order to receive\nany credits hereunder, Distributor shall provide Supplier with a report or\nreports specifying the number of units for which credits are requested, and\nSupplier shall grant such credits within thirty (30) days after receipt of any\nsuch report. In the event no amounts are due to Supplier at such time,\nDistributor shall mutually agree upon a method of payment for such credit\namount, which may include but shall not be limited to cash payment, in\naccordance with Section 2.7 of this Agreement. Should Supplier have reasonable,\nvalid cause to question or contest any credit requested under this Section 2.2,\nSupplier shall contest such amount or pose such question within thirty (30) days\nfollowing Supplier's receipt of Distributor's report(s) as described hereinabove\nor Supplier shall waive its rights to contest or question such credits and shall\nremit such credit amounts to Distributor as described in this Section 2.2.\n\n            (c) Section 2.2(b) shall apply to all Subsidiaries that have the\nrights of Distributor hereunder, provided that for such Subsidiaries (and also\nfor Merisel Americas, Inc. to the extent Product is held in inventory in North\nAmerica outside of the United States or ordered from a location in North America\noutside of the United States) the applicable credit shall be indexed to the\nlocal currency rate in effect on the date of the price decrease, for the\nterritory or country in which such inventory of affected Product(s) is located.\nIn no event shall the credit granted for such price decrease under this section\nexceed the aggregate purchase price paid in U.S. dollars for the products which\nare subject to the price decrease.\n\n            2.3 Payment Terms. Payments to Supplier with respect to all Products\nreceived by Distributor shall be due and payable within sixty (60) days after\nDistributor's receipt of the Products set forth on Exhibit A hereto; except for\nDistributor's Initial Stocking Order (\"ISO\"), which shall be due and payable\nwithin ninety (90) days after Distributor's receipt of the Products set forth on\nthe ISO. All payments shall be subject to (i) [**] of the date of receipt of\nProducts and (ii) a [**] if payment is made prior to the receipt of the order.\n\n\n                                     -2-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n            2.4 Rebates. Set forth on Exhibit A are Quarterly Sales Goals agreed\nupon by Distributor and Supplier for the first four fiscal quarters of\nDistributor during the term of this Agreement (with a prorated goal being\nincluded in the event this Agreement commences on a date other than the start of\na fiscal quarter of Distributor). In the event Distributor achieves the\nQuarterly Sales Goal in any quarter (as they may be adjusted from time to time\npursuant to Exhibit A), Supplier shall pay Distributor a rebate in the amount\ndetermined pursuant to Exhibit A within thirty (30) days after receipt of a\nsales report from Distributor setting forth its sales results. For quarters\nafter the first four quarters, Supplier and Distributor shall agree on mutually\nacceptable Quarterly Sales Goals as provided in Exhibit A.\n\n            2.5 [**]. Supplier agrees that [**] shall not at any time [**] and\nother terms and conditions of sale for the Products [**].\n\n            2.6 Recoupment.\n\n            (a) Distributor shall have the right of recoupment with respect to\nall amounts owed to it by Supplier under this Agreement. Any amounts payable to\nDistributor under this Agreement for any reason (including, without limitation,\nfor price protection, product returns, or marketing funds) shall first be\napplied as a credit by Distributor and shall reduce any uncontested amounts owed\nby Distributor to Supplier. In the event that Distributor maintains a credit\nbalance with Supplier after application of credits, Supplier shall, upon\nDistributor's request, promptly pay Distributor the amount of the remaining\ncredit balance via an instrument acceptable to Distributor (which may include,\nbut shall not be limited to, in Distributor's sole option, by cash, company\ncheck, cashier's check, or wire transfer).\n\n            (b) Distributor shall have the right of recoupment with respect to\nany amounts owed by it to Supplier. Any amounts owed to Supplier by Distributor\nunder this Agreement for any reason (including, without limitation, for the\npurchase of products) shall first be reduced by any amounts owed to Distributor\nby Supplier. In the event that Distributor maintains a debit balance with\nSupplier after such reduction (including the application of credits),\nDistributor shall have the right, in its sole option, to either: (i) return\nProducts in Distributor's inventory to Supplier for credit in the amount of the\npurchase price paid for such Products, less any credits previously issued to\nDistributor under Section 2.2 hereof, which credit shall be applied to the\namounts owed by Distributor to Supplier; or (ii) pay Supplier the amount owed by\nDistributor to Supplier. Irrespective of which option Distributor selects,\nDistributor shall retain all future rights to return Product as set forth in\nthis Agreement.\n\n\n                                       -3-\n\n      3.    Orders and Shipping.\n\n            3.1 Order Placement. Distributor shall place orders for Products\nwith Supplier in writing. Supplier shall use reasonable efforts to deliver\nProducts to Distributor within five (5) days of the delivery date set forth in\nDistributor's order, or, if no delivery date is specified on Distributor's\norder, within ten (10) days of Supplier's receipt of Distributor's order.\nDistributor shall have no obligation to order any minimum quantity of Products.\n\n            3.2 Allocation. In the event of any shortage of Products, upon order\nby Distributor Supplier shall ship to Distributor at least as many units of\nProduct as Supplier ships to any other similar customer. In the event any\nProduct is subject to limited availability at any time and Distributor has\nplaced orders for such Product, either prior to the date such Product becomes\nsubject to limited availability, or during such time as such Product is subject\nto limited availability, Supplier agrees to contact Distributor prior to\nshipping any order for such Product, and Distributor shall have the right, in\nits sole option and without liability, to cancel any existing order for such\nProduct(s).\n\n            3.3 Title and Risk of Loss. Products shall be shipped F.O.B. to the\nDistributor warehouse specified in the order. Any freight costs for Products\nshipped to Distributor shall be paid by Supplier.\n\n            3.4 Incorrect or Erroneous Shipment. In the event the Product(s)\nshipped to Distributor does not conform to the Product description for such\nProduct set forth on the applicable purchase order for such Product(s),\nDistributor shall contact Supplier, and Supplier shall ship the correct\nProduct(s) to Distributor within two (2) business days of Distributor's\nnotification of such misshipment to Supplier at no additional cost to\nDistributor. Distributor shall obtain a Return Material Authorization number, as\nis set forth in Section 5.4 of this Agreement, for any such Product and shall\nreturn any misshipped Product to Supplier, via freight collect, for credit in\nthe amount paid by Distributor for such Product.\n\n            3.5 Disclaimer of Standard Terms. All terms, conditions, or\nprovisions which may appear as pre-printed language or otherwise be inserted\nwithin any order, order confirmation or invoice for any Products shall be of no\nforce and effect notwithstanding the execution or delivery of such other\ndocument subsequent to the date of this Agreement.\n\n            3.6 Bar Coding. Supplier shall mark each Product sold to Distributor\nwith the appropriate UPC bar code: The preferred bar codes are Version A\nbarcode, or Code 39 with FACT Data Identifiers barcode. In the event Supplier\nutilizes any other UPC standard bar code, Supplier shall submit a sample of such\nbar code to Distributor, prior to the execution of this Agreement, to verify\ncompatibility with Distributor's bar\n\n\n                                       -4-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\ncode recognition systems. Distributor reserves the right, in its sole discretion\nand without penalty or liability to Distributor, to (i) refuse any shipment of\nProduct(s) which are not so marked; and (ii) elect not to set up any Product in\nits systems which is not marked with a UPC standard bar code compatible with\nDistributor's bar code recognition systems.\n\n      4.    Defective Products. Supplier shall accept the return of any Product\nalleged by Distributor or its customers to be defective and shall grant to\nDistributor a credit for any Products to be returned in the amount of the\npurchase price charged to Distributor therefor, less any applicable credits\npursuant to Section 2.2 hereof which have been previously paid to Distributor.\nSupplier agrees to issue Distributor a blanket Return Authorization for all\nProducts which are returned to Distributor, by its customers, as defective.\nSupplier also shall pay all freight charges for shipments of such Products to\nSupplier by Distributor.\n\n      5.    Inventory Maintenance.\n\n            5.1 Stock Balancing Rights. At any time or from time to time after\nthe date of execution of this Agreement, Distributor may stock balance Products\nwhich are in their original packaging to Supplier [**].\n\n            5.2 Acceptable Level Return Rights. In addition to the Stock\nBalancing Rights set forth hereinabove, in the event [**] at any time during the\nterm of this Agreement, Distributor may [**].\n\n            5.3 Discontinued Products.\n\n            (a) In the event Supplier shall discontinue any Product or declare\nany Product to be obsolete, Supplier shall notify Distributor thirty (30) days\nin advance of such discontinuation or declaration of obsolescence. Distributor\nshall have the right to return all units of such Product then in Distributor's\nInventory to Supplier, for credit for a period of [**] days following the\neffective date of discontinuation.\n\n            (b) In the event Supplier offers to Distributor, or any other\nsimilar purchaser, new Products which are of equivalent and\/or superior fit,\nform and function to a similar Product, and such new Product negatively affects\nDistributor's ability to sell such similar Product(s) then in Distributor's\ninventory, Distributor shall have the right to declare its inventory of such\nsimilar Product(s) functionally discontinued, shall so \n\n                                     -5-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\nnotify Supplier, and shall return the affected inventory of such functionally\ndiscontinued Product(s) for credit for a period of [**] days following the date\nof functional discontinuation.\n\n            (c) The return rights set forth in this Section 5.3 are in addition\nto any return rights described under Sections 5.1 and 5.2 of this Agreement.\n\n            5.4 Return Procedures. Supplier agrees to issue Distributor a\nblanket Return Authorization for all Products which are returned to Supplier by\nDistributor; or, at Distributor's sole option, Supplier shall issue a Return\nMaterial Authorization (\"RMA\") number for any Products Distributor requests to\nreturn within [**] business days following the date Distributor requests such\nRMA; (provided, however, that in the event such RMA is not issued within such\n[**] day period, Distributor shall have the right to return any units of the\nProduct(s) to Supplier without an RMA, and Supplier shall be obligated to accept\nsuch return). All Products returned pursuant to this Section 5 shall be unopened\nand in their original packaging. The amount of the credit for any returned\nProducts shall be equal to the original purchase price charged to Distributor\nless any credits pursuant to Section 2.2 hereof which have been previously paid\nto Distributor. Distributor shall bear all freight costs associated with returns\nof Product to Supplier by Distributor under Section 5.1 and 5.2. Supplier shall\nbear all freight costs associated with returns of Product to Supplier by\nDistributor under Section 5.3.\n\n      6.    Product Information Obligations and D.A.T.A. Bank Program.\n\n            6.1 Product Set Up, Descriptions and Technical Support Requirements.\nSupplier shall provide Distributor's Product Information Center with the\nmaterials set forth on Exhibit B hereto. Distributor may, from time to time,\nchange the requirements set forth in Exhibit B, and Supplier in its discretion\nmay continue to provide such new materials. Supplier shall be solely responsible\nfor the factual accuracy and completeness of any information or materials\nprovided to Distributor. Distributor reserves the right to delay set up in\nDistributor's systems of any Product for which this information is not provided.\n\n            6.2 Product Physical Information. Supplier agrees to provide\nDistributor with the per-unit weight of each Product (such weight to include\npackaging) to be distributed by Distributor, and the cube dimension of each unit\nof Product, each Master Carton (if any) for each Product, and each pallet.\nDistributor reserves the right to delay set up in Distributor's systems of any\nProduct for which this information is not provided.\n\n\n                                       -6-\n\n            6.3 New Products. Supplier agrees to provide Distributor with the\nmaterial described in Section 6.1 and Exhibit B hereof for all updates and\nrevisions of each Product and for each new Product made available for\ndistribution by Supplier during the term of this Agreement, and shall provide\nDistributor with thirty (30) days prior notice or at least as much notice given\nto any other similar purchaser of any such update, revision or new Product.\n\n            6.4 Product Changes. Supplier shall give Distributor thirty (30)\ndays notice, or at least as much notice as is given to any other similar\npurchaser for any changes in Product packaging, documentation or major version\nchanges.\n\n            6.5 Information, Products and Services.\n\n            (a) Distributor, from time to time, may design, develop and operate\na variety of materials, product catalogues, product set up forms, sales support\nand marketing services in connection with its wholesale computer products\ndistribution business, including, without limitation, maintaining an electronic\nlibrary containing computer hardware, software, peripheral and accessory product\ndescriptions, creating custom product descriptions upon the request of its\ncustomers, publishing a computer reseller price book, creating and publishing\nadvertisements for computer products; operating direct mail promotions,\npublishing catalogues; operating sales events and promotions and training\nsessions; operating an on-line order entry and information service\n(collectively, the \"Information Products\"). Distributor's Information Products\nmay also permit Supplier to communicate directly with resellers through on-line\nmessage boards and other technology.\n\n            (b) From time to time Supplier may provide information to\nDistributor for inclusion in the Information Products. Distributor may, in its\nsole discretion, with prior written approval from Supplier, charge a fee to the\nSupplier as a condition precedent for the inclusion of Supplier's information in\nan Information Product.\n\n            (c) Distributor, in its sole discretion, may publish the Information\nProducts through any available medium, including, without, limitation, through\non-line computer networks, print media, CD ROM, diskette, facsimile, cable or\nsatellite transmission. The type, amount and usage of the Information Products\nshall be as determined by Distributor from time to time, in its sole discretion.\nDistributor, in its sole discretion, may elect to charge the recipient of the\nInformation Products (the \"Customer\") for receipt of the Information Products\nand the pricing charged by Distributor may include a profit for Distributor.\nDistributor reserves the right to modify or terminate any Information Product at\nany time, without notice or liability to Supplier, unless Supplier has paid for\ninclusion in which case Distributor will notify Supplier and provide a refund\nfor service paid for but not provided.\n\n\n                                     -7-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n            (d) The information that is contained in the Information Products\ncome from the following sources:\n\n                  (i) Distributor created or generated information, including\nmaterials created by Distributor, that may or may not embody product information\nprovided by the Supplier; and\n\n                  (ii) Supplier provided \"Spec Sheets\", photographs and Supplier\ntrademarks, tradenames and logos (collectively, the \"Supplier Information\").\n\"Distributor Information\" means all intellectual property and information that\nis contained in the Information Products, except the Supplier Information.\n\n            (e) Distributor shall have the ownership rights for all Distributor\nInformation. Supplier grants Distributor a nonexclusive worldwide right and\nlicense to republish and distribute the Supplier Information and to include the\nSupplier Information in any Information Product that Distributor may produce\nfrom time to time. Supplier warrants to Distributor that it has all rights to\ngrant such a license in the Supplier Information.\n\n            (f) Supplier shall be solely responsible for the factual accuracy\nand completeness of any information provided to Distributor for use in any\nInformation Product.\n\n            6.6 D.A.T.A. Bank Program. At Supplier's sole discretion, Supplier\nmay participate in Distributor's D.A.T.A. Bank Program, in such countries where\nDistributor offers such a Program, a copy of which is attached to this Agreement\nas Exhibit C and which may subsequently be amended or discontinued by\nDistributor from time to time. Supplier's participation in the D.A.T.A. Bank\nProgram during each subsequent year shall be automatically renewed unless\nSupplier gives written notice to Distributor, in accordance with the terms set\nforth in Exhibit C, at least thirty (30) days prior to the expiration of the\nfirst or any subsequent Program year during the term of this Agreement.\nDistributor shall render an invoice each calendar quarter to Supplier for the\nparticipation fees payable by Supplier in connection with the D.A.T.A. Bank\nProgram during the preceding quarter. Invoices rendered hereunder shall be paid\nby Supplier within thirty (30) days after receipt or, at Distributor's option,\nDistributor may deduct such amounts from any amounts due Supplier hereunder.\n\n      7.    Marketing, and Shelf Space Acquisition Fee.\n\n            7.1 Programs and Development Funds. Supplier shall provide\nDistributor with marketing development funds equal to [**] of Distributor's\ngross \n\n\n                                       -8-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\npurchases of Products. Such funds shall be used in connection with marketing\nprograms to be mutually agreed upon by Supplier and Distributor. Supplier shall\nalso provide Distributor with Product launch funds of at least [**] to be\nutilized by Distributor to conduct initial marketing activities in connection\nwith the commencement of Distributor's relationship with Supplier, such funds to\nbe expended in accordance with a launch plan to be mutually agreed upon by\nSupplier and Distributor. Distributor shall invoice Supplier for all marketing\ndevelopment and launch funds due Distributor hereunder, and such invoices shall\nbe due and payable within [**] days after receipt or, at Distributor's option,\nDistributor may deduct such amounts from amounts due Supplier.\n\n            7.2 Shelf-Space Acquisition Fees. To defray the costs incurred by\nDistributor associated with the initial warehousing start-up expenses of the\nProduct(s), Supplier shall provide Distributor with a nonrecurring Shelf-Space\nAcquisition Fee in the amount of [**]. Supplier agrees to remit, to Distributor\nprior to the set up of any Supplier Product in Distributor's systems, the\nShelf-Space Acquisition Fee via an instrument acceptable to Distributor (which\nmay include, but shall not be limited to, in Distributor's sole option, by cash,\ncompany check, cashier's check, or wire transfer).\n\n            7.3 News Releases. No news releases, including photographs, films or\nvideos, public announcements, Product or company endorsements by Distributor or\nconfirmation of all, or any part of, the subject matter of this Agreement shall\nbe made public without the prior written consent of Distributor.\n\n      8.    Product Agreements and Indemnification.\n\n            8.1 No Violations. Supplier represents and warrants that the\npurchase of Products by Distributor and subsequent sale to its customers, as\ncontemplated by this Agreement throughout the United States, Canada and Mexico,\nand, to the best knowledge of Supplier, the sale of each Product in any other\nforeign country, violates no foreign, federal state or local law or regulation\nor any agreement between Supplier and any other person or entity.\n\n            8.2 Title and Infringement. Supplier represents and warrants that\n(a) it owns all rights, title and interest in and to the Products necessary to\nenter into and perform its obligations to Distributor hereunder, and (b) not\nwithstanding a current lawsuit against Supplier, to the best of Supplier's\nknowledge, no Product sold to Distributor during the term of this Agreement, nor\nthe use of any such Product, nor anything in or contemplated by this Agreement,\ninfringes upon the Intellectual Rights (as herein defined) of any other person\nor entity, and no suit or proceeding is pending or threatened alleging that any\nProduct or the use thereof infringes upon any Intellectual \n\n\n                                       -9-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\nRights. As used herein, the term \"Intellectual Right\" means any rights relating\nto any trademark, tradename, service mark, copyright, patent, trade secret or\nother proprietary right.\n\n            8.3 Indemnification. Supplier agrees to hold Distributor harmless\nand indemnify, reimburse, and defend it upon request at its own cost from any\nproceedings related to any claim asserted against Distributor or its customers\nwith respect to the Products, any information or materials provided by Supplier\npursuant to this Agreement, or which otherwise arises out of its relationship\nwith Distributor, (including without limitation any claim that any Product\ninfringes the Intellectual Rights of another) and shall pay them for all amounts\nowed by them to third persons and expenses incurred by them in connection with\nany such claim or suit. Notwithstanding the above, Supplier shall not be\nresponsible for indemnifying Distributor for claims resulting from (a) express\nwarranties by Distributor in excess of those provided by Supplier; (b) gross\nnegligence of Distributor; or (c) intentional misconduct by Distributor.\n\n            8.4 Insurance. Supplier shall maintain, at its expense, a policy or\npolicies of product liability insurance, with a broad form Vendor's Endorsement\nnaming Distributor as an additional insured, providing coverage of not less than\n[**] combined single limit, and shall provide Distributor with a Certificate of\nInsurance (including broad form Vendor's Endorsement) reflecting such coverage.\nThe Certificate shall provide for at least ten (10) days prior written notice of\ncancellation or substantial change.\n\n            8.5 Buy American Act. In order to ascertain whether or not the\nProducts meet the requirements of the \"Buy American Act\" and to ensure that the\nProducts may be exported to Canada and Mexico in accordance with the terms of\nthe North American Free Trade Agreement, Supplier shall set forth, on Exhibit A\nhereto, which Products, if any, are less than fifty-one percent (51 %) U.S.\nmanufactured, and further shall complete the information set forth on Exhibit D\nhereto, the \"Certificate of Origin\" with respect to each Product made available\nto Distributor under this Agreement, such form to be completed on or prior to\nthe date such Product is first made available for purchase hereunder. Further, a\nnew copy of such form shall be provided to Distributor each year during the term\nof this Agreement, prior to the annual anniversary date of such Agreement.\nSupplier shall indemnify Distributor, hold it harmless and reimburse it for any\nand all expenses or costs incurred by Distributor in the event the information\nset forth by Supplier on the \"Certificate of Origin\" is incorrect or erroneous.\n\n\n                                      -10-\n\n      9.    Term and Termination.\n\n            9.1 Unless earlier terminated as provided herein, this Agreement\nshall have an initial term of one years from the last date either party executed\nthis Agreement, and shall automatically renew for successive one year periods\nunless either party notifies the other party in writing of its election to\nterminate the Agreement at least sixty (60) days prior to the expiration of the\ninitial term or any renewal term, as applicable.\n\n            9.2 Either party may terminate this Agreement with or without cause,\nupon thirty (30) days prior written notice to the other party; provided that, in\nthe event the terminating party notifies the other party that such other party\nhas materially breached any provision of this Agreement, the party in breach\nshall have thirty (30) days after written notification detailing the breach is\ndelivered by the non-breaching party to cure such breach. If such breach is not\ncured within this thirty (30) day period, the non-breaching party shall confirm\nits intention to terminate the Agreement in writing within five (5) business\ndays, such termination to be effective immediately upon receipt, by the party in\nbreach, of such written response.\n\n            9.3 Upon expiration of this Agreement or termination by either\nparty, Distributor may return to Supplier for credit any Products in its\ninventory or returned to it by its customers within the succeeding one hundred\neighty (180) days under its stock balancing program. Distributor shall be\ncredited for any Products so returned in an amount equal to the original\npurchase price thereof, less any credits pursuant to Section 2.2 hereof which\nhave been previously paid to Distributor and shall be first applied to any\nuncontested amounts due Supplier. Any remaining balance shall be promptly paid\nto Distributor. Supplier shall bear all freight costs associated with returns of\nProduct to Supplier by Distributor under this Section 9 if Supplier is\nterminating without cause or Distributor is terminating due to Supplier's\nmaterial breach. Distributor will bear all freight costs associated with returns\nof Product to Supplier by Distributor under this Section 9 if Distributor is\nterminating without cause or Supplier is terminating due to Distributor's\nmaterial breach.\n\n      10.   General.\n\n            10.1 Entire Agreement. This Agreement contains all the agreements,\nunderstanding, representations, conditions, warranties and covenants, and\nconstitutes the sole and entire agreement between the parties hereto pertaining\nto the subject matter hereof and supersedes all prior communications or\nagreements, written or oral. This Agreement may not be released or modified\nexcept by the mutual written consent of both Distributor and Supplier as\nattested to by an instrument signed by an officer of each of them. If any\nprovision of this Agreement is declared invalid or unenforceable the remaining\nprovisions of this Agreement shall remain in full force and effect.\n\n\n                                      -11-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n            10.2 Independent Relationship. Nothing contained herein shall be\ndeemed or construed as creating a joint venture or partnership between\nDistributor and Supplier. Neither Distributor nor Supplier is by virtue of this\nAgreement authorized as an agent or other representative of the other.\n\n            10.3 Assignment. Except as expressly provided herein, neither this\nAgreement nor any rights or obligations hereunder may be assigned by either\nparty without the written consent of the other party; provided, that Distributor\nmay assign its rights and obligations hereunder to one or more subsidiary or\naffiliate corporations without consent, but Distributor shall remain liable for\nall obligations hereunder. In the event either party denies consent to\nassignment of this Agreement, the other party shall have the right to terminate\nunder Section 9.2.\n\n            10.4 Waiver or Delay. Any waiver of any provision of this Agreement,\nor a delay by either party in the enforcement of any right hereunder, shall\nneither be construed as a continuing waiver, or create an expectation of\nnon-enforcement, of that or any other provision of this Agreement, either in the\npresent or in the future.\n\n            10.5 Governing Law and Jurisdiction. The validity, interpretation,\nand performance of this Agreement shall be controlled by and construed under the\nlaws of the of the state of the non-filing parties. Venue shall lie in the\ncounty and state of the non-filing party.\n\n            10.6 Force Majeure. Neither party hereto shall be liable for the\nfailure to perform any of its obligations under this Agreement if such failure\nis caused by the occurrence of any force majeure beyond the reasonable control\nof such party, including without limitation fire, flood, strikes and other\nindustrial disturbances, failure of transport, accidents, wars, riots,\ninsurrections or acts of God.\n\n            10.7 Confidentiality. Distributor and Supplier shall hold in trust\nand confidence and shall not disclose for a period of [**] from the date of\ndisclosure any information deemed \"Confidential Information\" by the disclosing\nparty and identified as such at the time of disclosure. Information shall not be\ndeemed \"Confidential Information\" for the purposes of this Agreement that (i) is\nalready known to the non-disclosing party at the time of disclosure; (ii) is or\nbecomes publicly known through no wrongful act of the non-disclosing party,\nincluding by public announcement by the disclosing party; (iii) is received from\na third party without similar restrictions and without breach of this Agreement;\n(iv) is independently developed by the non-disclosing party; or (v) is lawfully\nrequired to be disclosed by any governmental agency or otherwise required to be\ndisclosed by law.\n\n\n                                      -12-\n\n            10.8 Headings. The headings appearing in this Agreement are inserted\nonly as a matter of convenience and in no way define, limit, construe or\ndescribe the scope or extent of such section or in any way affect such\nparagraph.\n\n            10.9 Counterparts. This Agreement may be executed in one or more\ncounterparts, all of which taken together shall constitute a single instrument\nand agreement.\n\n            10.10 Notices. Any notices under this Agreement shall be in writing\naddressed to both the President and Contract Administrator of such party at the\naddress set forth below (or such other address as a party may notify the other\nparty in accordance with these provisions), and shall be delivered by certified\nmail, return receipt requested or by an overnight delivery service of national\nstanding.\n\n      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the\ndate set forth below.\n\nMERISEL AMERICAS, INC.                  DRAGON SYSTEMS, INC.\n200 Continental Blvd.                   Address: 320 Nevada St.\nP.O. Box 984                            Newton, MA 02160\nEl Segundo, CA 90245-0984\n\nBy: \/s\/ James P. Faulkner               By: \/s\/ Janet M. Baker\n    --------------------------              --------------------------\n\nName: JAMES FAULKNER                    Name: Janet M. Baker\n\nTitle: VICE PRESIDENT                   Title: President\n       PRODUCT &amp; INVENTORY\n       MANAGEMENT\n\nDate: 1\/7\/98                            Date: 29 Dec 1997\n\n\n                                      -13-\n\n                                    EXHIBIT A\n\n\n                                    PRODUCTS\n\n\n                 SUGGESTED        DISTRIBUTOR     RESELLER         % U.S.\nPRODUCT          LIST PRICE       DISCOUNT        DISCOUNT         MFCTD.\n--------------------------------------------------------------------------------\n\n\n\n\n\n\n\n                                     REBATE\n\n            QUARTERLY SALES GOAL                REBATE PERCENTAGE\n\n\n\n\nDuring all subsequent years of the Agreement, the Quarterly Sales Goals and\nRebate Percentage for the year shall be as mutually agreed to by the parties\nhereto and shall be based upon Distributor's sales of the Products during the\nprior year. Any Quarterly Sales Goals shall, at Distributor's option, be amended\nfollowing the end of any calendar quarter, if both parties mutually agree to\nsuch amendments.\n\n\n                                      -14-\n\n                                    EXHIBIT B\n\n          PRODUCT INFORMATION CENTER AND TECHNICAL SUPPORT REQUIREMENTS\n\n1.    A new Product Set Up Form must be fully completed for each Product,\n      update, version change or new Product introduced by Supplier, which\n      Supplier wishes Merisel to distribute. The Product Set Up Form shall be\n      provided to Supplier by the Product Information Center.\n\n2.    Spec Sheets, Original Data Sheets and additional Supplier-provided\n      reference materials must be completely legible. Materials which are not\n      completely legible will be returned to Supplier and will not be used.\n\n3.    For each Product distributed by Distributor, Supplier is required to\n      provide the following:\n\n      3.1   Spec and Data Sheets.\n\n            3.1.1 Three (3) original Spec or Data Sheets for the Product and any\n                  product information which is available on CD-ROM.\n\n            3.1.2 If Supplier is new to Distributor, Supplier must send fifteen\n                  (15) Product family, or company product offering, brochures to\n                  each of the persons listed below:\n\n                  Director                      Director\n                  Inside Sales, West Coast      Inside Sales, East Coast\n                  Merisel, Inc.                 Merisel, Inc.\n                  200 Continental Blvd.         293 Boston Post Road West\n                  El Segundo, CA 90245          Marlboro, MA 01752\n\n            3.1.3 Distributor part numbers must be affixed to three (3) of the\n                  Spec Sheets referenced in Section 3.1.1. Distributor part\n                  numbers must also be affixed to the back sides of Product\n                  photographs or any sleeves containing transparencies.\n\n            3.1.4 If a Spec Sheet refers to multiple Products, all relevant\n                  Distributor part numbers must be listed on such Spec or Data\n                  Sheet.\n\n            3.1.5 If a Distributor part number is not available for a Product,\n                  Supplier should refer to its own part number.\n\n\n                                      -15-\n\n      3.2   Logos and Photos.\n\n            3.2.1 Two Supplier logos scanned at 2400 dpi resolution into EPS or\n                  TIFF files. One of the EPS or TIFF files must contain a\n                  black-and-white logo and one of the EPS or TIFF files must\n                  contain a color logo.\n\n            3.2.2 One (1) approximately 2\" x 3\" digitized color image of each\n                  product in high resolution CMYK TIFF format ready for output\n                  up to 2400 dpi. (Other formats such as native PhotoShop, EPS,\n                  etc. are also acceptable.)\n\n                                       OR\n\nDigitized images are preferred, but if they are not available please send: One\n(1) color photograph of each product (in 35-mm slide, 2 1\/4-inch or 4 X 5-inch\ntransparency format). All photos must be marked with Merisel SKU number and\/or\nManufacturer's UPC code. Merisel SKU number and\/or Manufacturer UPC code must\nalso be affixed to the back side of product photos or any sleeves containing\ntransparencies.\n\n      3.3   EMPTY BOXES. Two (2) empty boxes for each of Supplier's software\n            and\/or accessory Product(s) distributed by Distributor.\n\n      4.    SOFTWARE AND HARDWARE PRODUCT FOR EVALUATION TESTING.\n\n            4.1   For all Products which Distributor has not previously\n                  distributed, including, but not limited to, new models or\n                  software updates which differ significantly from previous\n                  releases, Supplier shall provide fully-functional\n                  \"Not-For-Resale\" (\"NFR\") software or hardware units of the\n                  Product(s) for a ninety (90) day evaluation testing by\n                  Distributor's Technical Support department, as follows:\n\n                  4.1.1 Evaluation\/NFR units of Products shall be sent to\n                        Distributor's Technical Support operations as follows:\n\n\n                                                       \n                        National Manager, Tech Support    Tech Support Operations\n                        Merisel, Inc.                     East Coast\n                        200 Continental Blvd.             Merisel, Inc.\n                        El Segundo, CA 90245              293 Boston Post Road West\n                                                          Marlboro, MA 01752\n\n                        2 Fully-functional copies of      1 Fully-functional copy of\n                        1 unit of each Hardware           Software\n\n\n\n                                     -16-\n\n                        Product\n\n            4.2   Supplier must complete and FAX a \"Product Tracking Form\" to\n                  the Distributor Product Information Center when any unit of\n                  evaluation\/NFR Product is shipped as set forth in Section 4.1\n                  above. The Product Tracking Form is available from\n                  Distributor's on-line FAX-back service; Supplier may obtain\n                  the FAX number for such service from the Product Information\n                  Center.\n\n\n                                      -17-\n\n                                    EXHIBIT C\n\n                           D.A.T.A. BANK CORE PROGRAM\n\n\nU.S. Program (U.S. dollars)\nSupplier agrees to participate in the D.A.T.A. Bank Program under the following\nterms and conditions:\n\nPARTICIPATION DETAILS\n\n1.    Initial program, period: Annual: August 1st - July 31st of each year (the\n      \"Program Period'). Participation starting after August 1st of any year\n      will be prorated. Merisel will invoice Supplier every three months for the\n      previous three months through July 31st of each year.\n\n2.    If Supplier wishes to discontinue participation in the D.A.T.A. Bank\n      Program, Supplier must provide a minimum of thirty (30) days written\n      termination notification before the end of the initial, or any subsequent,\n      Program Period, to the Director of Marketing for Distributor's \"'The\n      Information Company\" and Distributor's Contracts Administration Manager.\n      If such notification is not received within such thirty (30) day period,\n      Supplier's participation in the D.A.T.A. Bank Program will automatically\n      renew for that year and each year thereafter unless Supplier provides such\n      thirty (30) day minimum written notice of its intent to terminate its\n      participation in the D.A.T.A. Bank Program prior to the end of any Program\n      Period. Merisel has the right to cancel Supplier's program participation\n      by providing a minimum, of thirty (30) days written cancellation\n      notification to Supplier.\n\n3.    Supplier must participate in the D.A.T.A. Bank Core Program in order to\n      participate in unique, targeted Add-on Marketing Opportunities (a separate\n      contract will be provided for such Add-on Marketing Opportunities).\n\n4.    To ensure the D.A.T.A. Bank database remains current, reports will be\n      provided to participating Suppliers listing an inventory of library items\n      per SKU at least every two months.\n\n5.    Proof of performance will consist of one copy of SELline (one time only,\n      updates on-line), one copy of each CD-ROM and a listing of SKUs in the\n      Literature Fax-back System. By signing this agreement, Supplier waives all\n      rights to further proof of performance.\n\n\n                                      -18-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n6.    Suppliers are encouraged to promote their participation in D.A.T.A. Bank\n      with the use of the SELline and D.A.T.A. Bank logos in their reseller\n      communications.\n\n7.    Speed of upload of Supplier Information will depend on quality, volume and\n      timeliness of information submitted to Merisel by Supplier.\n\nPARTICIPATION REQUIREMENTS\n\nSupplier must maintain current information in Merisel libraries at all times by\nproviding the necessary coding and supporting materials through the ongoing\nproduct set-up process to take full advantage of D.A.T.A. Bank (e.g., Product\nDetail is driven by class codes submitted by Supplier during product set-up).\n\nPARTICIPATION FEES\n\nParticipation In D.A.T.A. Bank consolidates the distribution of your information\nthrough Merisel's electronic media: SELline, Salesnet, CD-ROM, and Literature\nFax-back System.\n\nAnnual fees (which include setup and maintenance) will be billed [**] and are\nbased on current Merisel Price Book SKU count a of the date of billing\n(\"baseline\" SKU count) and up to 50MB of Library information storage space. If\nSupplier SKU count is significantly exceeded (defined as [**] baseline SKU\ncount), Supplier will be required to upgrade to the next participation level.\nAdd-on Marketing Opportunities are offered at additional fees.\n\nFees:\n\n[**]\n\n\n[The D.A.T.A. Bank Program replaces the current On-Line Literature Library\n(OLLL). This agreement supersedes any prior agreement or terms for the OLLL\nprogram. By signing this agreement, Supplier authorizes Merisel to transfer\nfunds remaining in the OLLL to D.A.T.A. Bank Program equivalents.]\n\n\n                                      -19-\n\n                                    EXHIBIT D\n                              CERTIFICATE OF ORIGIN\n\n\n(Document Original To Be Attached)\n\n\n\n\n                                      -20-\n\n                       MERISEL AND MERCHANDISING SOLUTIONS\n                       MILITARY EXCHANGE PROGRAM AMENDMENT\n\nThis amendment (the \"Amendment\") is made as of by __________________________ and\nbetween Merisel Americas, Inc. (\"Distributor\") and Dragon Systems, Inc.\n(\"Supplier\") and constitutes an amendment to the Distributor Agreement between\nDistributor and Supplier dated          (the \"Agreement\"). This Amendment is\napplicable to Products purchased for resale to Military Exchange Customers of\nMerisel; purchases of Products by Distributor for resale to other customers\nshall remain governed by the Agreement without reference to this Amendment. To\nthe extent this Amendment conflicts with the terms of the Agreement, the terms\nof this Amendment shall govern and shall replace and supersede the Agreement; to\nthe extent this Amendment conflicts with, or adds to, the terms of any amendment\nexecuted prior to the date of execution below, the terms of this Amendment shall\ngovern and shall replace and supersede the previously executed document; all\nother terms and conditions of the Agreement shall remain in full force and\neffect. In consideration of the representations, warranties, covenants and\nagreements set forth herein and intending to be mutually bound, the parties\nhereto agree as follows:\n\n1.    MILITARY EXCHANGES PROGRAM PARTICIPATION: Supplier agrees to participate\nin Distributor's Military Exchange Program. Such participation in the Program\nprovides the following benefits:\n\n-     Products(s) placed in approximately 225* military bases worldwide.\n\n-     Products priced competitively.\n\n-     Product inventory is managed remotely (electronically) and through planned\n      monthly in-store visits* which guarantees accurate inventory and\n      exceptional reporting.\n\n-     Product presentations and POP placements are managed through monthly\n      in-store visits*.\n\n-     Proof of performance reporting, including sales, turns, and returns is\n      provided monthly.\n\n-     No charge to Supplier for on-site destruction by detailing partner*.\n\n      *     Number may vary based on base openings and\/or closings, and\n            allowable Planogram (number of SKUs at each base location).\n            Detailing is provided by Watt\/Spohn Universal.\n\n2.    MILITARY EXCHANGES PARTICIPATION COSTS: To defray the costs of supporting\nthe Military Exchange's contractual requirements for:\n\n-     Best of class pricing\n\n-     International freight\n\n-     In-store inventory management\n\n\n                                       -1-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n-     In-store detailing\n\nall provided by Distributor and Merchandising Solutions; Distributor shall\ndebit, monthly, from amounts owed to Supplier, an amount equal to [**] of the\nCost Of Goods Sold (COGS), based on net sales.\n\n3.    EXCEPTION RETURNS. Returns from Military Exchange Customers are limited,\nby Distributor, to [**] of the Military Exchange Customer's net purchases made\nin the prior calendar quarter. In the event any Military Exchange Customer\nreturns Product in excess of [**] of such Military Exchange Customer's purchases\nof Supplier's Product(s) made in the preceding calendar quarter, Supplier shall\nbe charged an Exception Returns fee equal to [**] of the aggregate value of the\nProduct returned which exceeds the [**] Military Exchange Customer returns\nallowance to offset the costs incurred by Distributor to handle each such\nexception return. In the event the parties mutually determine that a substantial\nreturn was the sole result of Distributor's actions, that return shall not count\ntowards the percentages set forth above.\n\n4.    DESTRUCTION OF PRODUCT. At Supplier's option, Distributor shall arrange to\nhave destroyed at an on-site location all Product that Distributor would\notherwise have the right to return under the terms and conditions of the\nAgreement and\/or of this Amendment. Distributor shall contact Supplier, on a\ncase by case basis, to either arrange the return of such Product, or arrange the\ndestruction of said Product, at Supplier's option. Product that is destroyed in\naccordance with the terms and conditions of this section shall not be subject to\nthe Exception Returns fee outlined above in Section 3. Supplier shall be\nresponsible for all costs of such on-site destruction of said Product, should a\ncharge for such service in the future arise.\n\n5.    REPORTS AND PAYMENT OF CREDITS. Within fifteen (15) days after the end of\neach month, Distributor shall provide Supplier with a report detailing the\nnumber of units and aggregate Purchase Price of all Products shipped by\nDistributor to Military Exchange Customers of Merisel in such month and the\namount of credit due Distributor under this Amendment. Distributor will deduct\nsuch amount from amounts due Supplier. In the event (i) no uncontested amounts\nare due Supplier by Distributor, or (ii) the amount of such uncontested amount\ndue to Supplier is not equal to the amount of such credit, Supplier shall pay\nDistributor the full amount or remaining balance of such credit promptly upon\nwritten request by Distributor, in a manner that is acceptable to Distributor.\n\nThis Amendment shall not be binding upon either party hereto until it has been\nexecuted by a duly authorized officer of each party. This Amendment may not be\n\n\n                                       -2-\n\nreleased or modified except by the mutual written consent of both Distributor\nand Supplier as attested to by an instrument signed by an officer of each of\nthem.\n\nExcept as modified herein, the terms and conditions of the existing\nAgreement shall remain in full force and effect.\n\nIN WITNESS WHEREOF, this Amendment is executed as of the day and year first\nabove written.\n\nMERISEL AMERICAS, INC.                  DRAGON SYSTEMS, INC.\n200 Continental Blvd.                   Address: 320 Nevada Street\nP.O. Box 984                            Newton, MA 02160\nEl Segundo, CA 90245-0984\n\nBy: \/s\/ James P. Faulkner               By: \/s\/ Janet M. Baker\n    -----------------------------           -----------------------------\nName: JAMES FAULKNER                    Name: Janet M. Baker\n\nTide: VICE PRESIDENT                    Title: President\n      PRODUCT &amp; INVENTORY MANAGEMENT\n\nDate: 1\/7\/98                            Date: Dec 29, 1997\n\n\n                                       -3-\n\n                                 RETAIL DIVISION\n                        DISTRIBUTION AGREEMENT AMENDMENT\n\nThis amendment (the \"Amendment\") is made as of          by and between Merisel\nAmericas, Inc. (\"Distributor\") and Dragon Systems, Inc., (\"Supplier\") and\nconstitutes an amendment to the Distributor Agreement between Distributor and\nSupplier dated             (the \"Agreement\"). This Amendment is applicable to\nProducts purchased for resale to Distributor's Retail Division Customers of\nMerisel's Retail Products Division; purchases of Products by Distributor for\nresale to other customers shall remain governed by the Agreement without\nreference to this Amendment. To the extent this Amendment conflicts with the\nterms of the Agreement, the term of this Amendment shall govern and shall\nreplace and supersede the Agreement; all other terms and conditions of the\nAgreement shall remain in full force and effect. In consideration of the\nrepresentations, warranties, covenants and agreements set forth herein\n(including the definitions set forth in Exhibit A hereto) and intending to be\nmutually-bound, the parties hereto agree as follows:\n\n1.    Retail Division Programs.\n\n      1.1 Administrative Services, Distributor agrees that it will distribute\nand license Products purchased under this Amendment only to Retail Division\nCustomers. As used in this Amendment, \"Retail Division Customer\" shall mean any\nentity who purchases products from the Retail Products Division of Distributor\nfor sale to end-users and for which Distributor provides one or more of the\nfollowing services: monthly inventory forecasting models; monthly inventory\naudits to determine stock on hand and sell-through; dedicated customer support\nrepresentatives for stock balancing, product version change rotation,\nrefurbishment procedures and special return authorization requests; specialized\nfinancing options; dedicated accounts receivable management representatives and\nprocedures; special operations support including customer-specific product\nlabeling, unique carton markings and special freight handling procedures; and\nweekly telecopy reports detailing new product additions, product version\nchanges, discontinued products, product price changes, and promotional\nopportunities.\n\n      1.2 Mutual Funds Program. Supplier shall cooperate, with Distributor's\nRetail Products Division in the Mutual Funds Program for its Retail Division\nCustomers. Mutual Funds provided to Distributor by Supplier for the Mutual Funds\nProgram shall be passed through to the Retail Division Customer by Distributor.\nIn addition, Supplier may, from time to time at its sole discretion, separately\nauthorize Distributor to conduct advertising and other activities and may agree\nat that time to pay the costs from funds outside of the allowance granted in the\npreceding sentence. In the event Supplier elects to terminate the provision of\nfunds under this Section 1.2, Supplier shall provide Merisel with not less than\nninety (90) days prior written notice \n\n\n                                       -1-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\nof such termination, and such notice shall be sent in accordance with the Notice\nrequirements set forth in the Agreement.\n\n2.    Retail Division Fees and Rebate.\n\n      2.1 Administrative Services Fee. To defray the cost of the Administrative\nServices set forth in Section 1.1 above provided by Distributor to Retail\nDivision Customers, Supplier shall credit Distributor's account, in accordance\nwith the procedures described in Section 6.1, with an amount equal to [**] of\nthe aggregate Purchase Price of all Products shipped by Distributor to Retail\nDivision Customers.\n\n      2.2 Mutual Funds Cost. Supplier shall be responsible to pay as its share\nof the cost of the Mutual Funds Program an amount equal to [**] of the Retail\nProduct Division's net cost of goods sold to those Customers listed on Exhibit\nB. Exhibit B may be amended from time to time to reflect additional Retail\nDivision Customers. If Supplier wishes to exclude any of the additional Retail\nDivision Customers from the Mutual Funds Program, Supplier must promptly notify\nDistributor, in writing. Supplier shall credit Distributors account with the\namounts contemplated under this Section 2.2, in accordance with the procedures\ndescribed in Section 6.1.\n\n      2.3 Automatic Rebate. In the event Distributor is able to secure the\nplacement of any of the Products purchased hereunder with any Retail Division\nCustomer listed on Exhibit C. Supplier shall provide Distributor with a\none-time, non-recurring rebate of an additional [**] of the aggregate value of\nthe initial stocking order placed by the Retail Division Customer with\nDistributor. Such rebate will be paid to Distributor by Supplier within thirty\n(30) days after Distributor's placement of the initial stocking order for such\nnew Retail Division Customer, in accordance with the procedures described in\nSection 6.2.\n\n3.    Product Changes and Price Protection.\n\n      3.1 In the event that Supplier shall (a) sell any additional Product not\nset forth in the Agreement (b) introduce a new version or materially change the\nspecifications or packaging of, or discontinue any Product, or (c) change the\nSuggested List Price of any Product, Supplier shall notify Distributor at least\nas quickly as Supplier notifies any other customer of Supplier. Such notice\nshall be sent via certified mail, Federal Express or other express mail service,\nto the Product and Inventory Management Department of Distributor.\n\n      3.2 In the event that the Purchase Price of any Product is reduced through\na reduction in the Suggested List Price of such Product or any other price or\nDiscount \n\n\n                                       -2-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\nreduction is made by Supplier, on a temporary or permanent basis to any other\ndistributor, Supplier will credit to Distributor an amount equal to the product\nof (a) the difference between the new Purchase Price and the former Purchase\nPrice for such Product and (b) the number of units of such Product then in\nDistributor's Inventory or Distributor's Retail Division Customers' inventory,\nsuch credit to be paid as set forth in accordance with the procedure specified\nin Section 6.2 hereof. All orders in transit and unshipped orders already\nscheduled by Supplier for Product affected by such price reduction shall be\nautomatically adjusted by Supplier to reflect such decrease. If the purchase\nprice of any Product is increased, Supplier shall honor any Distributor purchase\norders placed prior to the effective date of the increase at the price in effect\nimmediately prior to the time the increase is announced.\n\n4.    Product Returns: Stock Balancing, Discontinued Products, Exception\n      Returns.\n\n      4.1 Distributor may at any time or from time to time after the date hereof\nreturn to Supplier all Products from Inventory, including those Products\nreturned by the Retail Division Customers during the term of the Agreement, upon\nwritten notice to Supplier. Within thirty (30) days of Supplier's receipt of\nsuch returned Products, Supplier shall credit Distributor with an amount equal\nto the Return Price of such Products, in accordance with the procedures\ndescribed in Section 6.2. Distributor will bear the transportation costs to\nSupplier's U.S. location for all Products so returned.\n\n      4.2 In the event Supplier discontinues any Product or declares any Product\nto be obsolete, or end-of-life, Distributor shall have the right to return all\nunits of such Product then in its Inventory, including those Products returned\nby the Retail Division Customers during the term of the Agreement, for credit in\nthe amount of the Return Price of such discontinued Product, such credit to be\npaid in accordance with the procedures described in Section 6.2. Supplier will\nbear the transportation costs to Supplier's U.S. location for all Products so\nreturned.\n\n      4.3 In the event the Retail Division Customer returns any Product to\nDistributor, based on the failure of such Product to sell at an acceptable level\nthrough the Retail Division Customer, Distributor shall have the right to return\nall units of such Product then in its Inventory, including those Products\nreturned by the Retail Division Customers during the term of the Agreement, for\ncredit in the amount of the Return Price of such Product. Such credit shall be\npaid in accordance with the procedures described in Section 6.2. Distributor\nwill bear the transportation costs to Supplier's U.S. location for all Products\nso returned.\n\n      4.4 Exception Returns: Returns from Retail Division Customers are limited,\nby Distributor, to [**] of the Retail Division Customer's net purchases made in\n\n\n                                     -3-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\nthe prior calendar quarter. In the event any Retail Division Customer returns\nProduct in excess of [**] of such Retail Division Customer's purchases of\nSupplier's Product(s) made in the preceding calendar quarter, Supplier shall be\ncharged an Exception Returns fee equal to [**] of the aggregate value of the\nProduct returned which exceeds the [**] Retail Division Customer returns\nallowance to offset the costs incurred by Distributor to handle each such\nexception return. In the event that the parties mutually determine that a\nsubstantial return was the sole result of Distributor's actions, that return\nshall not count towards the percentage set forth above.\n\n5.    Defective Products. Distributor may return any unit of Product which it or\nany Retail Division Customer finds to be defective in workmanship or material or\ndamaged in shipment to Distributor for credit in the amount of the Return Price\nof such unit. Such credit shall be paid in accordance with the procedures\ndescribed in Section 6.2. All transportation charges for Product so returned\nshall be borne by Supplier.\n\n6.    Reports and Payment of Credits.\n\n      6.1 Within fifteen (15) days after the end of each month, Distributor\nshall provide Supplier with a report detailing the number of units and aggregate\nPurchase Price of all Products shipped by Distributor to Retail Division\nCustomers in such month and the amount of credit due Distributor under Sections\n2.1 and 2.2 hereof with respect thereto. Within thirty (30) days of receipt of\nsuch report, Supplier shall credit Distributor's account for the aggregate\ncredit set forth in such report. If such credit is not received within such\nthirty (30) day period, Distributor may, at Distributor's option, deduct such\namount from amounts due Supplier. In the event (i) no uncontested amounts are\ndue to Supplier by Distributor; or (ii) the amount of such uncontested amount\ndue to Supplier is not equal to the amount of such credit, Supplier shall pay\nDistributor the full amount or remaining balance of such credit promptly upon\nwritten request by Distributor.\n\n      6.2 Any credits due to Distributor, by Supplier, as specified in Sections\n3.2, 4.1, 4.2, 4.3, 4.4 and 5 of this Amendment shall be paid to Distributor\nwithin thirty (30) days from the date of the return for which such credit is to\nbe issued. Any such credit shall be applied to any uncontested, outstanding\namounts due to Supplier by Distributor with respect to the Products. In the\nevent (i) no uncontested amounts are due to Supplier by Distributor; or (ii) the\namount of such uncontested amount due to Supplier is not equal to the amount of\nsuch credit, Supplier shall pay Distributor the full amount or remaining balance\nof such credit promptly upon written request by Distributor.\n\n\n                                       -4-\n\n          Confidential Materials omitted and filed separately with the\n         Securities and Exchange Commission. Asterisks denote omissions.\n\n\n7.    Other Term and Provisions.\n\n      7.1 In the event of any shortage of newly launched Product(s), upon order\nby Distributor, Supplier shall ship to Distributor a pro rata share of available\nProduct based on the percentage of Product previously purchased by Distributor\nin the prior two (2) calendar quarters in relation to other similarly situated\ndistributors and aggregators\n\n      7.2 Supplier shall mark each Product sold under this Amendment with the\nappropriate UPC Bar Code and shall, upon the request of Distributor, provide\nDistributor with all information regarding the UPC Barcode and its contents.\nSupplier shall indemnify Distributor, hold it harmless and reimburse it for any\nand all expenses or costs incurred by Distributor in the event such bar code, or\nbar code information, is incorrect or erroneous.\n\n      7.3 In the event that the Agreement is terminated, Distributor shall have\nthe right to return any or all Products of Supplier remaining in Distributor's\ninventory, its Retail Division Customers' inventory and\/or returned to\nDistributor by its Retail Division Customers [**] under its dealer stock\nbalancing program. Supplier shall repurchase such returned products at their\nReturn Price.\n\n      7.4 Execution. The Amendment shall not be binding upon either party hereto\nuntil it has been executed by a duly authorized officer of each party. This\nAmendment may not be released or modified except by the mutual written consent\nof both Distributor and Supplier as attested to by an instrument signed by an\nofficer of each of them.\n\n\n                                       -5-\n\nExcept as modified herein, the terms and conditions of the existing Agreement\nshall remain in full force and effect.\n\nIN WITNESS WHEREOF, this Amendment is executed as of the day and year first\nabove written.\n\nMERISEL AMERICAS, INC.                  DRAGON SYSTEMS, INC.\n200 Continental Blvd.                   320 Nevada Street\nP.0. Box 984                            Newton, MA 02160\nEl Segundo, CA 90245-0984\n\nBy: \/s\/ James P. Faulkner               By: \/s\/ Janet M. Baker\n    ---------------------------             ---------------------------\nName: JAMES FAULKNER                    Name: Janet Baker\n\nTitle: VICE PRESIDENT                   Title: President\n       PRODUCT &amp; INVENTORY MANAGMENT\n\n\n                                       -6-\n\n                                    EXHIBIT A\n\n                                   DEFINITIONS\n\nFor the purpose of this Agreement, the following terms shall have the meanings\nset forth below:\n\n      1. \"Discounts\" shall mean the discount from the Suggested List Price of\nthe Product used to determine the Purchase Price of such Product.\n\n      2. \"Distributor\" shall mean any person or entity purchasing Products from\nSupplier for sale to Retailers.\n\n      3. \"Inventory\" shall mean at any time all units of Product (a) in\nMerisel's inventory, (b) ordered by Merisel but not yet received by Merisel at\nsuch time, and\/or (c) returned by Retail Division Customers to Merisel within\none hundred eighty (180) days of such time.\n\n      4. \"Merisel\" shall mean Merisel, Inc. and any parent, subsidiary or\naffiliated corporations it may have during the term hereof.\n\n      5. \"Products\" shall mean all of the present and future personal computer\nand related products designated by Supplier for standard retail distribution in\nU.S. and Canada during the term of this Amendment and all improvements and\nvariations thereof, including, without limitation, all foreign language versions\nfor distribution in the U.S. and Canada.\n\n      6. \"Purchase Price\" of any Product shall be as determined under the\nAgreement.\n\n      7. \"Retailer\" shall mean any person who sells any Product to end-users in\nretail stores.\n\n      8. \"Return Price\" for any unit of Product shall mean the amount originally\nbilled Merisel for such unit less any rebates or amounts under Section 2 with\nrespect to such unit actually paid or credited by Supplier to Merisel.\n\n      9. \"Reseller\" shall mean any person or entity who resells any product.\n\n      10. \"Suggested List Price\" of any Product shall mean the retail sales\nprice of such Product as suggested by Supplier to retailers.\n\n                                    EXHIBIT B\n\n\n                                       -7-\n\n                           Mutual Funds Retailer List\n\n\n                                                 \n2Connect                    Computer Emporium          Home Shopping            \n47th St. Photo              Computer Express           Network                  \nAafee                       Computer Express           Inc. Tri-City Sales, Inc.\nABM Group Corp.             Computer Hut               Information              \nAdvanced Logic              Computer Images            Technologies, Inc.       \nIndustries, Inc.            Computer Marketplace,      Infostar, Inc.           \nAdvanced Micro              Inc.                       Intelicom, USA           \nSolutions                   Computer Network           J&amp;R Computer World       \nAmerican Appliance          Services                   Jade Systems             \nAnmar's                     Computer Network           Jonathan's Computer      \nAnn &amp; Hope                  Systems Corp.              Centers                  \nApex Department Stores      Computer Paradise          K &amp; K Laser Graphix      \nAtchley Appliance &amp; TV      Computer SuperCenter       Kay-Bee Toy Stores       \nAtlantic N.E. Marketing,    Computer Systems of        Key America              \nInc.                        Sumter                     KFBC, Inc.               \nAVR Enterprises, Inc.       Computer Town              L.O.S.                   \nBarnes &amp; Noble              Computerbanc               Corporation\/Nationwide   \nBeat Street                 Computers Etc.             Laptop Superstores       \nBJ's Wholesale Club         Connect Computer Corp.     Learning Smith           \nBlumenthal's                Connecting Point           Lipman Computers         \nBoscov's Department         Computer Ctr.              Management Advisory      \nStore                       County TV &amp; Appliance      Software                 \nBrandsmart USA              CyberPlay                  McAuliffe, Inc.          \nBurdines                    Cybersmith                 McCartney's Computer     \nCaldor                      CyberWarehouse             Center                   \nCapitol Computers, Inc.     Daily Business             Mega Port, Inc.          \nCentral Data Computer       Products\/ISG               Metro Business Systems   \nCtrs                        Data Trend, Inc.           Micro Products           \nChaney Computer             Datavision Computer        Micro-Computer Centre    \nAssoc., Inc.                Video                      Micro\/Center             \nChemung Computer            Electronics Boutique       MicroGallery, Inc.       \nCherrytree Software         Friendship Computer        Microland                \nCircuit City Stores         Supplies                   MicroRetailing, Inc.     \nClipper Technologies,       Future Computer Inc.       Moovies                  \nInc.                        H &amp; H Service Store        More Computers           \nCollege &amp; University        Hartney Enterprises Inc.   N.E. Microcomputer       \nComputers                   Heilig-Meyers              Solution                 \nComcity Inc.                HMV Record Stores          Nationwide Comp. &amp; Command Services            Holdren's                  Electronics              \nCompunet                    Home Depot                 Nationwide Computers     \nComputeam                   Home Entertainment Co.     Nationwide TV &amp; Computer Concepts Inc.                                 Appliance                \n\n                                                            \n\n                                       -8-\n\n\n                         \nNATM                        Technology Works, Inc.   \nNavy Exchange               The ASCII Group          \nCommand                     The Computing Center     \nNobody Beats the Wiz        The Consumer             \nNoodle Kidoodle             Expo\/Event Mkt.          \nOEO, Inc.                   The Molway               \nOffice Depot                Corp.\/Bitznbytes         \nOmnitech Computer,          The Shields Group, Inc.  \nInc.                        TOPS Appliance City      \nP.C. Richard &amp; Son          Toys R Us                \nPatterson-Erie Corp.        TransNet Corporation     \nPC Connection               UL&amp;F Computers           \nPC Warehouse                Un-Plug it               \nPC's Complete               United CD-ROM            \nPercy's                     Univ. System &amp; Service   \nPersonal Computer           of Princeton             \nStore, Inc.                 Valens Information       \nQVC                         Systems, Inc.            \nRCS                         Voyles, Inc.             \nRoberds                     Well Informed            \nSason Corporation           Computing                \nShoreline Computers         West Coast               \nInc.                        Entertainment            \nSimplex Computer            Whalley Computer         \nCenters                     Assoc., Inc.             \nSixth Avenue Electronics    Wood Market, Ltd.        \nCity                        Zany Brainy              \nSoftware City               \nSoftware City Computer\nCenter\nSoftware City Computer\nCenter\nSoftware City of Puerto\nRico\nSpec's Music\nStaples, Inc.\nState Street Discount\nSunrise Computers\nSyracuse Computer\nStore, Inc.\nSystem Plus Computers,\nInc.\nTechnical Challenge, Inc.\nTechnical Institute\n\n\n\n                                       -9-\n\n                                    Exhibit C\n                         Automatic Rebate Retailer List\n\n\n\n                                                          \nConnect                         Learning Smith                  The Consumer Expo\/Event Mkt.\nCapitol Computers, Inc.         Metro Business Systems          TOPS Appliance City\nChaney Computer Assoc., Inc.    Micro-Computer Centre           Well Informed Computing\nCherrytree Software             MicroGallery, Inc.              Whalley Computer Assoc., InC.\nComcity Inc.                    MicroRetailing, Inc.\nCommand Services                More Computers\nCompunet                        Nationwide Comp. &amp; Electronics\nComputeam                       Omnitech Computer, Inc.\nComputer Concepts Inc.          PC. Connection\nComputer Emporium               PC's Complete\nComputer Express                Personal Computer Store, Inc.\nComputer Express                Roberds\nComputer Hut                    Sason Corporation\nComputer Images                 Shoreline Computers Inc.\nComputer Marketplace, Inc.      Simplex Computer Centers\nComputer Network Services       Sixth Avenue Electronics City\nComputer Network Systems Corp.  Software City\nComputer SuperCenter            Software City Computer Center\nComputer Systems of Sumter      Software City Computer Center\nComputers Etc.                  Software City of Puerto Rico\nConnect Computer Corp.          Syracuse Computer store, Inc.\nConnecting Point Computer Ctr.  The Computing Center\n\n\n\n                                      -10-\n\nDRAGON SYSTEMS, INC.\nThe Natural Speech Company                           320 NEVADA STREET\n                                                     NEWTON, MASSACHUSETTS 02160\n\n                                    AMENDMENT\n\nMarch 10, 1998\n\nMr. James Faulkner\nMERISEL AMERICAS, INC.\n200 Continental Blvd.\nP.O. Box 984\nEl Segundo, CA 90245-0984\n\nDear Mr. Faulkner:\n\n      In light of the training and special use requirements of Dragon\nNaturallySpeaking,(TM) Deluxe Edition and other high-end products, we are now\nrequiring Certification of all our Resellers who resell our Deluxe Edition.\nDistributors may not sell such product to any Reseller who does not have this\nCertification. Therefore, the following provision amends the January 7, 1998\nAgreement between DRAGON and Merisel and is to be inserted as Paragraph 10.11 in\nthe Agreement.\n\n      10.11 \"Reseller Certification. Commencing on March 1, 1998, DRAGON\n      requires that all its Distributors use reasonable efforts to ensure that\n      their resellers procure a Certification Number from DRAGON that allows the\n      reseller to sell Dragon NaturallySpeaking(TM), Deluxe Edition and other\n      high-end DRAGON products (generally, those products which retail for $500\n      or more). Resellers are specifically prohibited from selling these\n      products without this Certification. Distributor may not sell such\n      products without first ascertaining that the reseller has procured such\n      Certification.\"\n\nPlease sign below indicating your acknowledgment and acceptance of this\nAmendment.\n\nSincerely,\n\n\/s\/ S. Semenzato\n------------------------------\n\nSteve Semenzato\nDirector, North American Sales\n\nACKNOWLEDGED AND ACCEPTED\nBy: James P. Faulkner\n    --------------------------\nSignature: \/s\/ James P. Faulkner\nTitle: VP Product \/ Inventory Mgt\nDate: 5\/13\/98\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7354,8196],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9613,9619],"class_list":["post-42252","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-dragon-systems-inc","corporate_contracts_companies-merisel-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-operations","corporate_contracts_types-operations__sales"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42252"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42252"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42252"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}