CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT 10.24
AGREEMENT NO._______
NETGEAR, INC.
RETAIL OUTLET RETAILER AGREEMENT
PARTIES TO THE AGREEMENT
This Agreement is entered into as of this 1st day of April,1998, ("Effective
Date") by and between NETGEAR, Inc., having its principal place of business at
4401 Great America Parkway, P.O. Box 58185, Santa Clara, California 95052-8185
("NETGEAR"), and Circuit City Stores, Inc. having its principal place of
business at 9950 Mayland Drive. Richmond, VA 23233 ("Retailer").
1. APPOINTMENT
Subject to Retailer's performance of its obligations under this Agreement and
responsibilities as described in the NETGEAR Retailer Manual ("Retailer Manual")
that is in effect on the Effective Date of this Agreement and as may be amended
from time to time (amendments to NETGEAR Retailer Manual shall only affect or
bind Retailer on product ordered after the date such an amendment has been
communicated.) Retailer is appointed as a NETGEAR Retail Outlet Reseller and may
purchase certain hardware equipment and licenses for certain software
(collectively unless otherwise stated, "Products"), as are listed in NETGEAR's
then-current price list (the "Price List") for resale or license solely through
its captive retail outlets identified in Exhibit 2 ("Retail Outlets")
2. TERRITORY
Except as may be otherwise provided by law, Retailer may not distribute or
re-export any Products outside of the United States without the specific
written consent of NETGEAR.
3. ORDERS
A. Retailer may obtain Products by placing orders under this Agreement
which are accepted by NETGEAR. No order will be effective until accepted by
delivery of NETGEAR's order acknowledgment. Retailer agrees that each order
placed with NETGEAR for Products shall be governed by this Agreement, regardless
of any additional or conflicting term in Retailer's order. Orders may be sent by
telefax or other electronic media approved by NETGEAR, must be for minimum lot
sizes and must conform to the ordering guidelines as described in the NETGEAR
Retailer Manual that is in effect on the Effective Date of this Agreement and as
amended from time to time.
4. PRICES, TAXES AND PAYMENT
A. Prices, Prices for Products are those set out in NETGEAR's Price List,
less the applicable discount specified in Exhibit 1. All Product prices are
F.O.B. NETGEAR's point of shipment, except as specified in Section 6 D.
B. Taxes and other levies. Prices are exclusive of any tax, fee, duty or
governmental charge, however designated (except taxes on NETGEAR's net income).
If Retailer is claiming exemption from any tax or other governmental charge.
Retailer must provide NETGEAR with a valid certificate of exemption.
C. Payment. Terms of payment are [*] of current NETGEAR inventory on hand.
This amount is to prevent a debit balance situation from occurring and is exempt
from the terms noted above. In the event that the Retailer is ever in a debit
balance with NETGEAR, NETGEAR agrees to provide Retailer, upon request and
reconciliation, with a check for such debit balance. All payments are to be made
in U.S. dollars. NETGEAR reserves the right to withhold shipment in the event
Retailer is delinquant in making payments.
5. PRICE CHANGES
NETGEAR AND RETAILER acknowledge that they have read this Agreement, including
any Exhibits, understand them and agree to be bound by their terms and
conditions.
NETGEAR: RETAILER:
NETGEAR, INC. Circuit City Stores, Inc.
By: /s/ Andrew F. Mancone By: /s/ [ILLEGIBLE]
-------------------------- -----------------------
Name: Andrew F. Mancone Name: [ILLEGIBLE]
Title: Eastern Regional Sales Manager NETGEAR Title: Buyer
Date: January 12, 1998 Date: 4-1-98
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A. List Prices are subject to change at any time, provided Retailer is
given sixty (60) days written notice of any price increases.
B. In the event of a List Price Increase for any of the Products, NETGEAR
will extend to the Retailer the price in effect at the time the Retailer's order
is acknowledged by NETGEAR.
C. In the event of a List Price decrease for any of the Products, the new
lower price will apply to such Products which are shipped by NETGEAR to Retailer
on or after the effective date of the price decrease.
D. In the event of a List Price decrease on any of the Products, Retailer
may apply for a price protection credit as provided for and in accordance with
the terms contained in the then current Retailer Manual.
6. SHIPMENT, CANCELLATION, RETURNS, TITLE, RISK OF LOSS, SECURITY INTEREST
A. Shipment NETGEAR will ship Products ordered by Retailer using a method
and Carrier selected by NETGEAR unless otherwise instructed in Retailer's order.
NETGEAR is responsible for and shall pay all freight, handling, and other
transportation charges. The foregoing notwithstanding, in the event Retailer
request expedited shipment or other than normal freight handling or requests
shipment to other than to Retailer's central receiving location listed in
Exhibit 3, Retailer shall reimburse NETGEAR for any resulting excess freight or
handling charges. NETGEAR will ship all Products to Retailer's central receiving
location listed in Exhibit 3. Any request by Retailer to ship Products to other
than the location listed in Exhibit 3 shall be subject to prior review and
approval of NETGEAR. Retailer may change the designated receiving location
listed in Exhibit 3 upon sixty(60) days advance written notice to NETGEAR.
B. Cancellation and Rescheduling, Retailer may cancel or reschedule any
order, without charge, by giving NETGEAR written notice at least [*] prior to
the ship data specified in NETGEAR's order acknowledgment, Retailer may not
cancel or reschedule any order. In whole or in part, less than [*] prior to the
corresponding shipment data specified in NETGEAR's order acknowledgment.
C. Returns. [*]. Prior to returning any Product, whether for exchange or
warranty or non-warranty action, Retailer must obtain a Return Materials
Authorization (RMA) number from NETGEAR. Retailer should return the Product to
NETGEAR, with shipping charges prepaid and Issue a chargeback to be reimbursed
for such shipping charges. NETGEAR will not accept collect shipments. Any
Product returned to NETGEAR, which is not required in accordance with the terms
of this Agreement, may be subject to a [*] of the purchase price of the Products
returned.
D. Title, risk of loss, security interest. For all shipments to location's
within the United States title to the Produces passes to Retailer when presented
by NETGEAR or its agent to the carrier. Title passage notwithstanding, NETGEAR
retains risk of loss of or damage to the Products until the Products are
delivered to Retailer at Retailer's designated receiving location. NETGEAR
retains and Retailer grants a purchase money security interest in each of the
Products, and in any replacement, addition or proceeds in the amount of its
purchase price until paid in full. Upon request, Retailer will promptly execute
and return for filling any documents, such as a form UCC-1, needed to perfect
NETGEAR's security interest and acknowledges that NETGEAR may file a copy of
this Agreement as a form UCC-1.
7. PRODUCT EXCHANGE PRIVILEGES
A. [*].
8. TERM OF AGREEMENT AND TERMINATION
A. TERM. This Agreement will be in effect for one year from the Effective
Date. The Agreement may review for additional one year terms, but only upon the
prior written mutual agreement of the parties.
B. TERMINATION. This Agreement may be canceled at any time without cause,
by either party upon ninety (90) days written notice to the other party. Either
party may immediately terminate this Agreement if (i) the other party becomes
involvement, files or has filed against it a petition in bankruptcy, or causes
doing business; or (ii) the other party fails to care a material branch of the
Agreement within thirty (30) days after receipt of written notice of such breach
from the party and in default. Upon termination of the Agreement by NETGEAR for
Retailer's branch NETGEAR any cancel all Retailer's unfulfilled orders without
further obligation.
C. EFFECT OF TERMINATION. Except as otherwise specifically stated in the
Agreement, neither party will be liable in the other for damages in any form by
reason of the expiration or earlier termination of the Agreement.
9. WARRANTIES
A. WARRANTY PERIOD. The warranty period for each Product is specified in
the documentation that accompanies the Product when shipped. NETGEAR reserves
the right to change a warranty period for a specific Product, but only for
Products shipped after the effective date of such change. The minimum warranty
period for all Products is ninety days or as mandated by applicable status in
the end use country.
B. LIMITATIONS. These warranties do not apply to any Product which has
been (i) altered except by NETGEAR or in accordance with its instructions, or
(ii) used in conjunction with another vendor's product if such use results in
the defect, or (iii)
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damaged by improper environment, abuse, misuse, accident or negligence.
Replacement parts furnished under this warranty may be refurbished or contain
refurbished components.
THE FOREGOING WARRANTIES AND LIMITATIONS ARE EXCLUSIVE REMEDIES AND ARE IN LIEU
OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY LIMITATION
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ANY PRODUCT
THAT MAY BE FURNISHED BY NETGEAR WHICH IS NOT LISTED IN THE PRICE LIST, OR WHICH
IS IDENTIFIED IN THE PRICE LIST AS AN "AS IS" PRODUCT, IS FURNISHED "AS IS" WITH
NO WARRANTIES OF ANY KIND.
10. SOFTWARE
A. Retailer may procure for and distribute licenses to use NETGEAR
software and accompanying documentation by placing orders under this Agreement.
The terms of the licenses for such Software to which end-users are subject are
included as a "shrink-wrap" license agreement with the Software and in its
accompanying documentation when shipped by NETGEAR (the "License Agreement").
Retailer agrees that for each Software product it procures under this Agreement,
Retailer will (i) assure the delivery of the License Agreement to its customers,
and (ii) use reasonable efforts to inform it resale customers of the requirement
to deliver the License Agreement to their end-user customers in the form
supplied by NETGEAR with the Products.
B. Retailer may not, nor authorize its resale customers or the end-user to
translate, decompile, discountable, use for any competitive analysis, or reverse
engineer the software or its documentation, in any way. Retailer may not nor
authorize its resale customers or the end-user to translate any portion of the
software or associated documentation into any other format or foreign language
without the prior written consent of NETGEAR. In no event may Retailer grant the
U.S. Government rights in any software greater than those set out in
subparagraphs (a) through (d) of the Commercial Computer Software - Restricted
Right clause at FAR 52.227-19 and the limitations for civilian agencies set out
the License Agreement; and subparagraph (???)(1)(ii) of the Right in Technical
Data and Computer Software clause at DFARS 252.227-7013 for agencies of the
Department of Defense.
C. If all or part of the NETGEAR products or updates delivered to Retailer
has been licensed by NETGEAR from a third party software supplier than,
notwithstanding anything to the contrary contained in this Agreement, Retailer
and its resale customers or the end-user is granted a sublicense to the third
party software subject to the same terms and conditions as these contained in
the agreement between that third party supplier and NETGEAR and/or Bay Networks.
NETGEAR reserves the right to substitute any third party software in the NETGEAR
Products so long as the new third party software does not materially affect the
functionality of the NETGEAR Producer.
11. PROPRIETARY RIGHTS AND INFORMATION
A. Use of Proprietary Information. "Proprietary Information" includes,
without limitation, the Software, all documentation for Software, other user
manuals, as well as electronically and visually transmitted printed materials
and information disclosed by Retailer or NETGEAR, such as new product
information. Financial or technical data, that is marked with a proprietary or
confidential legend. Each party agrees to hold the Proprietary information of
the other in confidence and to use the Proprietary Information only
for the purposes expressly permitted under this Agreement, and to disclose
Proprietary information only to its employees and contractors as authorized
in this Agreement and then only on a need-to-know basis. Each party agrees to
maintain adequate internal Procedures, including appropriate agreements with
employees and authorized third parties, to protect the confidentiality of the
Proprietary Information as required by this Agreement. Each party is entitled to
appropriate injunctive relief in the event of any unauthorized disclosure or use
of its Proprietary information by the other party.
B. Limitations Proprietary Information does not include information which
(i) is rightfully in the receiving party's possession in a complete and
tangible form before it is received from the disclosing party, (ii) is or
because a matter of public knowledge through no fault of the receiving party,
(iii) is rightfully furnished to the receiving party by a third party without
restriction on disclosure or use, or (iv) is independently developed by the
receiving party without use of or reference to the disclosing party's
Proprietary Information.
D. Reservation of Rights. NETGEAR, on behalf of itself and its suppliers,
reserves all proprietary rights in and to (i) all designs, engineering details,
and other data pertaining to the Products, (ii) all original works, computer
programs, fixes, update (but not Retailer's or end-users' developed programs),
discoveries, inventions, patents, know-how and techniques arising out of work
does wholly or in part by NETGEAR or its subcontractors in connection with the
Agreement, and (iii) any and all products developed as a result of such work.
12. TRADEMARKS AND TRADE NAMES
A. Use of trademarks. In the advertising and promotion of the Products,
Retailer agrees to use NETGEAR's and certain of Bay Networks' trade names, logos
and trademarks (the "Trademarks") only as described in the NETGEAR Retailer
Manual that is in effect on the Effective Date of this Agreement and as amended
from time.
B. Rights to Trademarks. Retailer acknowledges that Bay Networks is the
exclusive owner of the Trademarks and the use of the Trademarks by Retailer does
not convey to Retailer any right, title or interest in or to the Trademarks.
13. CLAIMS OF INFRINGEMENT
A. Indemnification. NETGEAR agrees to defend at its own expenses any
action brought against Retailer to the extent that it is based on a claim that
any Product infringes a United States or Territory patent, copyright trade mark,
trade secret or other valid intellectual property right, and will pay any costs
and damages finally awarded against Retailer in any such actions which are
attributable to any such claim. NETGEAR's obligation under the preceding
sentence is subject to the
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conditions that (i) Retailer promptly notifies NETGEAR in writing of any such
claim, (ii) NETGEAR has sole control of such defense and all negotiations for
any settlement or compromise, and (iii) should any Product become, or in
NETGEAR's opinion be likely to become, the subject of any such claim, Retailer
permits NETGEAR, at NETGEAR's option and expense, to procure for Retailer the
right to continue using such Product, to replace or modify it so that it becomes
(???) or to grant Retailer a credit for such Product at depreciated on a
three-year, straight-line basis, and accept its return.
B. LIMITATIONS. NETGEAR has no liability to Retailer under this section
entitled CLAIMS OF INFRINGEMENT with respect to any claim which is based upon or
results from (i) the combination of any Product with any equipment, device,
firmware or software not furnished by NETGEAR, or (ii) any modification of any
Product by a party other than NETGEAR, (iii) Retailer's failure to install or
have installed changes, revisions or updated as instructed by NETGEAR, or (iv)
NETGEAR's compliance with Retailer's or end-user's specifications, designs or
instructions.
14. LIMITATION OF LIABILITY
A. NETGEAR agrees to indemnify Retailer against any claim arising out of
or resulting from the Products or the Agreement, provided that any such claim
(i) is attributable to bodily injury, death, or to injury to or destruction of
physical property (other than the Products), and (ii) is caused by the negligent
act or omissions of NETGEAR. This obligation on the part of NETGEAR is subject
to Retailer's obligation to (a) give NETGEAR prompt written notice of any such
claim, (b) grant NETGEAR control of the defense and settlement of such claim,
and (c) assist fully in the defense provided that NETGEAR reimburses Retailer's
out-of pocket costs, NETGEAR has no liability for any settlement or compromise
made without its prior written consent. Under no circumstances is NETGEAR liable
for any third-party claims expect for those described in the section and in the
section entitled CLAIMS OF INFRINGEMENT.
B. NETGEAR, at its expense, agrees to maintain adequate Insurance coverage
to protect against its liabilities under the Agreement. This insurance will
include (a) worker's compensation insurance, (b) comprehensive general liability
insurance, including coverage for product liability, bodily injury and property
damage, and (c) automobile liability insurance. Upon Retailer's written request.
NETGEAR will furnish the applicable certificate of insurance.
IN NO EVENT WILL EITHER PARTY OR THEIR RESPECTIVE SUPPLIERS BE LIABLE FOR (1)
THE COST OF SUBSTITUTE PROCUREMENT, SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, OR (2) ANY DAMAGES RESULTING FORM INACCURATE OR LOST DATA
OR LOSS OF USE OR PROFITS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
THE FURNISHING OF SERVICES, OR THE USE OR PERFORMANCE OR PRODUCTS, EVEN IF
INFORMED OF SUCH DAMAGES. IN NO EVENT WILL NETGEAR'S TOTAL LIABILITY FOR (1) ANY
DAMAGES IN ANY ACTION BASED ON OR ARISING OUT OF OR IN CONNECTION WITH THE
AGREEMENT EXCEED THE TOTAL AMOUNT PAID TO NETGEAR PURSUANT TO THE AGREEMENT, OR
(2) CLAIMS BASED UPON THE PARTIES' OBLIGATIONS UNDER THE SECTION ENTITLED
"SERVICES" EXCEED THE TOTAL AMOUNT PAID TO NETGEAR FOR SUCH SERVICES.
15. GENERAL
A. The relationship of NETGEAR and Retailer is that of independent
contractors. There is no relationship of agency, partnership, joint venture,
employment or franchise between the parties. Neither party has' the authority to
bind the other or to incur any obligation on the other's behalf or to represent
itself as the other's agent or in any way which might result in confusion as no
the fact that the parties are separate and distinct entitles.
B. If any provision of this Agreement is held to be invalid or
unenforceable, the remainder of the provisions shall remain in full force and
affect.
C. NETGEAR and Retailer agree to comply with the provisions of all
applicable federal, state, county and local laws, ordinances, regulations and
codes, domestic and foreign. Retailer agrees not to export, directly or
indirectly, any such Produces or information to any country for which an export
license or other governmental approval is required at the time of expert without
first obtaining such license or approval. Retailer is solely responsible, at its
own expense, for obtaining all necessary import and re-export permits and
certificates and for the payment of any and all taxes and duties imposed upon
the movement and delivery of Products.
D. NOTICES. All notices or communications of any kind made or required to
be given pursuant to this Agreement shall be in writing and delivered to the
other party at the address set forth below, unless either party gives notice to
the other party of a change of address:
To NETGEAR:
NETGEAR, Inc.
4401 Great America Parkway
P.O. Box 58185
Santa Clara, CA 95052-8135
Attn: Kelly Romero
To Retailer
Jason Topal
Circuit City Stores, Inc.
9950 Maryland Drive
Richmond, VA 23233
E. NETGEAR reserves the right to change the discount schedule, policy or
program, whether referred to in the Agreement or set forth in an Exhibit to the
Agreement. For changes which, in NETGEAR's opinion, may adversaly affect
Retailer, NETGEAR will provide thirty (30) days notice, or such longer period as
NETGEAR deems appropriate, prior to the effective date of such change.
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F. Any waiver, amendment or modification of any right, remedy or other
term under the Agreement will not be effective unless in writing and signed by
and authorized person of the party against whom enforcement is sought. Neither
party shall be bound by typographical or clerical errors.
G. Neither party is liable for its failure or delay to perform its
obligations under the Agreement due to strikes, wars, revolutions, acts of
terrorism, fires, floods, explosions, earthquakes, shortages in labor,
components or materials, government regulations, or other causes beyond its
control.
H. This Agreement may not be assigned by Retailer without prior written
permission from NETGEAR. Any attempt by Retailer to assign any right, or
delegates any duty or obligation which arises under the Agreement without such
permission will be voidable.
I. Notwithstanding anything else in this Agreement, all rights and
obligations of the parties, specifically including but not limited to those set
forth in Section 11 ("Proprietary Information"), 13 ("Claims of Infringement")
and any other terms, which by the specific language or by reasonable implication
are to continue beyond the term of this Agreement, shall survive the expiration
or termination of this Agreement.
J. This Agreement, including its attachment, constitutes the entire
agreement between Retailer and NETGEAR with respect to the purchase, resale and
distribution of the Products and is governed by the laws of the State of
California.
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