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 10.29
Date: August 28, 2002 Vendor A/P No. ___________________
Dept. No 24
COSTCO WHOLESALE VENDOR AGREEMENT (BASIC)
UNITED STATES (2000)
NETGEAR, Inc. ("Vendor") and both Costco Wholesale Corporation and The Price
Company (both referred to as "Costco Wholesale") agree that:
A. AGREEMENT DOCUMENTS. All sales and deliveries of all products by Vendor
to Costco Wholesale (or other purchaser under paragraph C below), and
all purchase orders by Costco Wholesale to Vendor, will be covered by
and subject to the terms of each of the following documents
(collectively the "Agreement Documents"):
- This Vendor Agreement;
- The attached Costco Wholesale Standard Terms United States (2000),
as they may be amended from time to time ("Standard Terms"); and
- Each Vendor Purchase Program Agreement, Item Agreement and special
program agreements (such as warehouse displays, promotions or
rebates) that have been or will be signed between the Vendor and
Costco Wholesale.
B. INCONSISTENCY. The above Agreement Documents collectively are an
agreement between us, are part of this Vendor Agreement and are
incorporated herein by reference. In case of any inconsistency between
any Agreement Documents, the last such document in the above list will
take priority over any document higher on the list.
C. PURCHASER. Each purchase will be made in the trade name of "Costco
Wholesale," but will be for the account of either Costco Wholesale
Corporation ("Costco") or The Price Company ("Price") or both, or of
their affiliates or licensees for whom Costco and Price act as
purchasing agents.
D. INSURANCE. The insurance requirements are set forth in Section 16 of
the Standard Terms.
E. DISPUTES. Disputes shall be resolved under Sections 20 and 21 of the
Standard Terms.
F. RELATIONSHIP OF THE PARTIES. The relationship between Costco Wholesale
and Vendor is that of an independent contractor and Vendor agrees that
it has not and shall not hold itself out as, nor shall Vendor be deemed
to be, an agent of Costco Wholesale.
G. VENDOR CODE OF CONDUCT. Vendor agrees to comply with Costco Wholesale's
vendor Code of Conduct (11-1-99) as outlined in the November 1999
letter from Jim Sinegal, President and CEO, to all Costco Wholesale
Vendors.
Page 1
H. OTHER FORMS. The Agreement Documents supersede all terms in Vendor's
invoices and other forms, and all prior oral or written communications
between us, for the matters covered in the Agreement Documents. No
party is entering into these Agreement Documents in reliance on any
oral or written promises, representations or understandings other than
those in the Agreement Documents. The Agreement Documents can be
amended only in a writing signed by an authorized official of each of
us.
I. The agreement Documents can be canceled at anytime without cause, by
either party upon 60 days written notice to the other party. Vendor
agrees to fulfill all outstanding obligations unless otherwise provided
in writing by Costco Wholesale.
J. LIMITATION OF LIABILITY. With the exception of Vendor's indemnification
obligations set forth in the agreement documents, in no event will
either party be liable to the other party for special, direct or
consequential damages.
COSTCO WHOLESALE CORPORATION VENDOR:
THE PRICE COMPANY
By: /s/ illegible By: /s/ Ray Robidoux
------------------------------- -------------------------------
(Buyer) (Signature of Owner, Officer,
or other Authorized Employee)
By: /s/ illegible By: Ray Robidoux
------------------------------- -------------------------------
(GMM) (Print Name and Title)
Page 2
COSTCO WHOLESALE STANDARD TERMS
UNITED STATES (2000)
These terms and conditions ("Standard Terms") apply to every shipment
and sale of Merchandise from Vendor either to Costco Wholesale Corporation
("Costco") or The Price Company ("Price") or affiliates or licensees for whom
Costco and Price act as purchasing agents ("Affiliate Purchasers"), unless
otherwise agreed in writing and signed by Costco or Price and by Vendor. Each
purchase will be made in the trade name of "Costco Wholesale," but will be for
the account of either Costco or Price or both, or of one of the Affiliate
Purchasers. The term "Costco Wholesale" as used below means the entity or
entities for which the purchase is being made. The term "Agreement Documents"
refers to all documents as defined in the Basic Vendor Agreement.
1. MERCHANDISE AND PALLETS.
(a) "Merchandise" includes all goods described in any Costco
Wholesale Purchase Order to Vendor and all packaging, instructions, warnings,
warranties and other materials and services normally included with such
Merchandise. Packing (including pallets) shall comply with all requirements of
the carrier and Costco Wholesale, and its cost is included in the price of the
Merchandise. Vendor shall inspect all Merchandise prior to shipment to ensure
quality, safety and conformity and to ensure that the Merchandise is properly
packed and loaded to prevent transit damage and tampering.
(b) "Pallets" must at a minimum, be of standard GMA #1 quality, 4
way entry (40" x 48") or CHEP. In the event pallets do not meet these minimum
standards, Costco Wholesale, at its sole option, may, at Vendor's sole expense,
reject the Merchandise and/or rework the pallets.
2. PURCHASE ORDERS. Vendor may ship only against a written Costco
Wholesale Purchase Order ("Purchase Order"). A Purchase Order shall be
considered an acceptance of any offer to sell by Vendor. Also, shipment in
response to a Purchase Order is acceptance of the Purchase Order and of these
Standard Terms. Except as specified in a Purchase Order, projections, any past
purchasing history and representations about quantities to be purchased are not
binding and Costco Wholesale shall not be liable for any act or expenditure
(including expenditures for equipment, labor, materials or packaging) by Vendor
in reliance on them. The relationship between Costco Wholesale and Vendor is
that of an independent contractor and Vendor agrees that it has not and shall
not hold itself out as, nor shall Vendor be deemed to be, an agent of Costco
Wholesale.
3. P.O. & ITEM NUMBER. Vendor shall mark all invoices, bills of
lading, and packing lists to show legibly the complete Costco Wholesale Purchase
Order and Item number(s) to which they relate.
4. DOCUMENTS. Vendor shall comply with all billing, payment and
document instructions in the Costco Wholesale Vendor Credit Information Packet,
as it may be revised from time to time. On the date any Merchandise is shipped,
Vendor shall send to the "Bill To" address an original invoice which reflects
Costco Wholesale's Purchase Order and accounts payable vendor number. The actual
scale weights shall be shown on all bills of lading and other shipping documents
which must accompany the Merchandise to the shipping destination. Any claims
submitted by Vendor to Costco Wholesale regarding unpaid invoices, partial
payments, RTVs, rebate or audit deductions, etc. must be submitted on a Costco
Wholesale Standard Vendor Claim Form.
5. PRICE CHANGES. The prices on Costco Wholesale's Purchase Order
are not subject to any increase or additional charges because of increased cost,
any change in law or any other reason. Also, Vendor must give Costco Wholesale
[*] advance written notice of any price change on future orders.
6. PAYMENT. Unless otherwise agreed in writing, Costco Wholesale
shall not be obligated to pay any invoice until [*] after delivery is completed
under Section 7 below. Vendor shall not assign or factor its account without
prior written notice by Vendor to Costco Wholesale. Said assignee or factoring
third party is only entitled to the payment validly owed to Vendor and said
assignment does not confer upon assignee or factor any other rights. Once the
account has been assigned to a third party, the assignment shall not be changed
or discontinued without the prior written consent of both the Vendor and such
third party and prior written notice to Costco Wholesale.
7. DELIVERY. Vendor will be responsible for making all claims
with the carrier, in writing, for all losses or damages and/or rework expenses
regardless of whether Costco Wholesale arranges carriage, designates the carrier
and/or pays the freight. Sales are on a delivered basis and Vendor's delivery of
the Merchandise will occur and risk of loss will pass only when and to the
extent conforming Merchandise has been received at the Costco Wholesale
warehouse or depot designated in the Purchase Order and a Costco Wholesale
employee has signed the bill of lading or other shipping document acknowledging
that receipt. However, if the Purchase Order designates an FOB sale with
delivery to an ocean port or carrier for ocean shipment, the terms of sale and
delivery will be FOB Vessel Incoterms 2000. All ocean shipments for Hawaii and
Alaska are FOB Costco Wholesale.
8. LATE SHIPMENT. Costco Wholesale [*]. Vendor shall notify
Costco Wholesale immediately if any shipment will not occur in time to arrive by
the "Ship To Arrive Date". Vendor shall ship back orders and late shipments only
to the extent authorized in writing by Costco Wholesale, and only on a freight
prepaid basis at Vendor's expense.
Page 1
COSTCO WHOLESALE STANDARD TERMS UNITED STATES(2000)
9. COMPLIANCE WITH LAWS. Vendor warrants all Merchandise to be
manufactured, processed, packaged, labeled, tagged, tested, certified,
accurately marked, weighed, inspected, shipped and sold in compliance with all
applicable industry standards and all applicable federal, state, provincial and
local laws, treaties and regulations, including by way of example all laws and
regulations relating to health, safety, environment, serial and identification
numbers, labeling and country of origin designation; and including all FDA,
toxic substances, OSHA and EPA regulations, Federal Meat Inspection Act or
Poultry Products Inspection Act, or any other food safety statute; Customs
requirements; and the requirements of California Proposition 65. Vendor agrees
to execute and/or furnish to Costco Wholesale on reasonable request, all
certifications, guaranties and other documents regarding compliance with such
laws and regulations, including any Material Safety Data Sheet ("MSDS") as
required by OSHA regulations.
10. U.L. All electrical Merchandise must be approved by
Underwriter's Laboratories, Inc.
11. ABILITY TO SELL. Vendor warrants and represents to Costco
Wholesale that the Merchandise and its resale will not infringe any patent,
trademark, trade dress, trade name, copyright or other right; that the
Merchandise is without defects and has adequate warnings and instructions; and
that Vendor is not a party to any agreement or understanding, and that there is
no other impediment or restriction that limits, prohibits or prevents Vendor
from selling and delivering the Merchandise to Costco Wholesale or limits,
prohibits or prevents Costco Wholesale from reselling the Merchandise.
12. REJECTION/MERCHANDISE RETURN.
(a) Costco Wholesale [*], any Merchandise, shipment or portion
thereof that is non-conforming, or that is shipped contrary to Costco
Wholesale's instructions, or that is in excess of the quantities covered by the
Purchase Order, or that allegedly contains any defect or inadequate warnings or
instructions, or allegedly violates any law, regulation, or court or
administrative order, or allegedly infringes any patent, trade name, trade
dress, trademark, copyright or other right;
(b) [*]. Vendor hereby assumes, and shall bear and pay, all risks
and expenses of unpacking, examining, repacking, storing, holding and/or
reshipping or returning any such Merchandise, and shall reimburse Costco
Wholesale its net landed cost for such Merchandise as shown on the books of
Costco Wholesale, in addition to any other remedies available to Costco
Wholesale. In the event Vendor's payment terms include a cash discount, such
discount is not refundable to Vendor upon return of Merchandise pursuant to this
Section 12;
(c) [*]
(d) In the event Costco Wholesale cancels any Purchase Order
pursuant to Section 8, rejects any Merchandise due to its non-conformance
pursuant to this Section 12, accepts customer returns pursuant to Section 13, or
exercises its rights under Section 14, Costco Wholesale shall not be liable for
any, damages including consequential or incidental damages or lost profits or
expenses incurred by Vendor as a result of such cancellation, rejection,
acceptance, revocation of acceptance, refund, or offset.
13. CUSTOMER RETURNS. Costco Wholesale may reject or revoke
acceptance of any Merchandise returned by Costco Wholesale's customers for any
reason stated in Section 12(a) above.
14. REFUND; OFFSETS. At Costco Wholesale's option, Vendor [*]; and
Costco Wholesale may offset any such amounts against amounts Costco Wholesale
owes to Vendor. Costco Wholesale may also offset costs associated with defective
pallets, monies owed for regulatory fines or penalties (including associated
attorneys' fees), any rebates/incentive allowances and any other amounts owed by
Vendor against amounts Costco Wholesale owes to Vendor. Costco Wholesale may, at
the end of a season, at the close of a business relationship, or otherwise, hold
back a reasonable reserve for future claims against amounts owed. In the event
there remains an outstanding balance owed Costco Wholesale after such offset,
Vendor shall immediately pay to Costco Wholesale said balance.
15. INDEMNITY. Vendor shall defend, hold harmless and indemnify
Costco Wholesale and its subsidiaries, affiliates, employees, agents and
representatives from and against any and all claims, actions, liabilities,
losses, fines, penalties, costs and expenses (including reasonable attorneys'
fees) arising out of:
(a) Any actual or alleged infringement of any patent, trademark,
trade name, trade dress, copyright or other right relating to any Merchandise,
or other breach of these Standard Terms,
(b) Any actual or alleged death of or injury to any person, damage
to any property, or any other damage or loss, by whomsoever suffered, claimed to
result in whole or in part from the Merchandise or any actual or alleged defect
in such Merchandise, whether latent or patent, including any alleged failure to
provide adequate warnings, labeling or instructions,
Page 2
COSTCO WHOLESALE STANDARD TERMS UNITED STATES(2000)
(c) Any actual or alleged violation of any law, statute or
ordinance or any administrative order, rule or regulation relating to the
Merchandise, or to its manufacture, shipment, import, labeling, weights and
measurements, use or sale, or any failure to provide an MSDS or certification,
or
(d) Any act, activity or omission of Vendor or any of its
employees, representatives or agents, including activities on Costco Wholesale's
premises and the use of any vehicle, equipment, fixture or material of Vendor in
connection with any sale to or service for Costco Wholesale.
These indemnities and obligations of Vendor shall not be affected or limited in
any way by Costco Wholesale's extension of warranties to its customers, or by
any approval, specification, act or omission of Costco Wholesale. Vendor shall
have no obligation to defend, hold harmless and indemnify Costco Wholesale for
Costco Wholesale's sole negligence or intentional acts.
16. INSURANCE.
(a) Vendor shall obtain and maintain, at its expense, a policy or
policies of:
(i) Commercial General Liability (including product and
completed operations, personal and advertising injury and
contractual liability coverage), with a minimum of [*] General
Aggregate limit; [*] Products and Completed Operations
Aggregate limit; and [*] each occurrence, written on an
occurrence form.
(ii) For Vendors whose employees enter Costco Wholesale's
premises, Workers' Compensation Insurance with statutory
limits and Employers' Liability (Stop-Gap Liability) insurance
with minimum limits of [*]; Automobile Liability Insurance
with [*] coverage limits for each accident, including owned,
non-owned and hired vehicles.
(b) Vendor will provide Certificates of Insurance at all times
naming Costco Wholesale Corporation and The Price Company as "Additional
Insureds" with respect to General Liability and Automobile Liability policies,
and attach the Broad Form Vendor Endorsement executed in favor of Costco
Wholesale and The Price Company, to the Certificates of Insurance, and
protecting all parties from the liability set forth in 16(a) above. Vendor's
insurers must be Best's rated B+, VII or better. Vendor shall provide the
Certificates of Insurance, evidencing the required coverage, prior to receiving
a Purchase Order from Costco Wholesale.
(c) Policy limits may not be reduced, terms changed, or policy
canceled with less than thirty (30) days' prior written notice to Costco
Wholesale. Vendor's insurance shall be primary with respect to all obligations
assumed by the Vendor pursuant to the Agreement Documents. It shall be the
responsibility of the Vendor to ensure that any of its agents, representatives,
subcontractors, and independent contractors comply with the above insurance
requirements. Coverage and limits referred to above shall not in any way limit
the liability of the Vendor.
17. RECALLS. In the event Merchandise is the subject of a recall
(which includes safety notices) initiated by Costco Wholesale, Vendor, or a
government or consumer protection agency, Vendor shall be responsible for all
costs and expenses associated with the recall or notice and shall reimburse
Costco Wholesale for all costs and expenses incurred by Costco Wholesale related
to the recall or notice, including recalling, shipping and/or destroying the
Merchandise (and where applicable, any products with which the Merchandise has
been packaged, consolidated or commingled), including refunds to customers and
Costco Wholesale's net landed cost of unsold Merchandise.
18. TAXES. Costco Wholesale's purchase is for resale unless Costco
Wholesale otherwise states in writing. Vendor's pricing should be exclusive of
all sales, use and like taxes. If claiming the resale sales tax exemption,
Costco Wholesale .will provide Vendor with valid tax exemption (resale)
certificates for those states where deliveries are to be made. Vendor's
invoicing Costco Wholesale for any tax or fee shall constitute a warranty that
Vendor is duly registered with the agency which levies the tax or fee. If Vendor
does not remit the tax or fee to the appropriate agency, and/or if the same tax
or fee is subsequently assessed by the agency against Costco Wholesale, Vendor
shall reimburse Costco Wholesale for all amounts of tax or fee Costco Wholesale
has remitted to Vendor to date and Vendor shall defend, indemnify and hold
harmless Costco Wholesale against all losses, penalties, interest and expenses
(including attorneys' fees).
19. OTHER REMEDIES. The exercise of any remedy herein shall be
without prejudice to any other right or remedy available to either party.
20. DISPUTES AND ARBITRATION. All claims and disputes that (1) are
between Vendor and Costco Wholesale or its affiliates, Affiliate Purchasers,
subsidiaries, parents and/or their employees, and (2) arise out of or relate to
the Agreement Documents or any agreement or transaction or occurrence between
Vendor and Costco Wholesale or to their performance or breach (including any
tort or statutory claim) ("Arbitrable Claims"), shall be arbitrated under the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"), in
English at Seattle, Washington, before one neutral arbitrator who may be a
national of any party and who shall be a member of the AAA's Large Complex Case
Panel. All documents and information relevant to the claim or dispute in the
possession of any party shall be made available to the other party not later
than sixty (60) days after the demand for arbitration is served, and the
arbitrator may permit such depositions or other discovery deemed necessary for a
fair hearing. The hearing may not
Page 3
COSTCO WHOLESALE STANDARD TERMS UNITED STATES(2000)
exceed two days. The award shall be rendered within 120 days of the demand. The
arbitrator may award interim and final injunctive relief and other remedies, but
may not award punitive damages. No time limit herein is jurisdictional. Any
award of the arbitrator (including awards of interim or final remedies) may be
confirmed or enforced in any court having jurisdiction. Notwithstanding the
above, Costco Wholesale or Vendor may bring court proceedings or claims against
each other (i) solely as part of separate litigation commenced by an unrelated
third party, or (ii) if not first sought from the arbitrator, solely to obtain
in the state or federal courts in King County, Washington, temporary or
preliminary injunctive relief or other interim remedies pending conclusion of
the arbitration. In the case of contradiction between the provisions of this
Section 20 and the Commercial Arbitration Rules of AAA, this Section shall
prevail.
21. VENUE; ATTORNEYS' FEES. Vendor consents to the personal
jurisdiction and venue of the federal and state courts in King County,
Washington, for any court action or proceeding. The prevailing party in any
arbitration or court action or proceeding shall be awarded its reasonable
attorneys' fees, expenses and costs.
22. GOVERNING LAW. The Agreement Documents and all agreements
between Vendor and Costco Wholesale shall be governed by and construed according
to the laws of the state of Washington without regard to conflicts of laws
principles.
23. SEVERABILITY. If any provision of any Agreement Document or of
any agreement between Vendor and Costco Wholesale is held invalid or
unenforceable, it shall be so held to the minimum extent required by law and all
other provisions shall remain valid and enforceable.
24. BAR CODES. Vendor shall place on all Merchandise sold to
Costco Wholesale an accurate Universal Product Code ("UPC") that complies with
the written Costco Wholesale Uniform Product Code Requirements, as amended from
time to time. Vendor will promptly supply Costco Wholesale with its 12-digit
manufacturer assigned UPC number. If Vendor fails to place an accurate UPC on
any Merchandise, Costco Wholesale may assess Vendor for Costco Wholesale's
internal costs and any associated fines, costs, expenses or attorneys' fees
levied. If requested by Costco Wholesale, Vendor shall place Costco Wholesale's
assigned item number on all Merchandise supplied to Costco Wholesale.
25. CALIF. PROP. 65. Vendor represents it is fully aware of, and
agrees to comply with, California Proposition 65 (Calif. Health & Safety Code
25249.5-25249.13) and its implementing regulations (22 Calif. Code Reg. Section
12000 et seq), including the following:
(1) The Merchandise must not contain chemicals known to
the State of California to cause cancer or reproductive toxicity; or
(2) The quantity of the chemical in question is in
compliance with the Federal and California standards, or the Merchandise must
carry a warning label that complies with California law.
Vendor shall provide Costco Wholesale a current MSDS that meets the requirements
of OSHA regulations and California Admin. Code, Title 8, Section 5194, or a
statement from the manufacturer that no MSDS is legally required for the
Merchandise.
26. OZONE LAWS. Vendor represents and certifies that:
(1) No Merchandise contains any foam or other substances
("Banned Substances") banned under regulations adopted by the U.S. Environmental
Protection Agency ("EPA") or under any other U.S. laws or regulations; and
(2) The Merchandise either (a) does not contain and/or is
not manufactured with the use of any Class 1 or Class II Ozone-Depleting
Chemicals ("ODCs"), or (b) is properly labeled in full compliance with EPA
regulations and other applicable laws and regulations.
27. TRADEMARKS. The ownership and exclusive use of the trademarks
owned by Costco Wholesale, which include Costco Wholesale and all derivatives
thereof, shall remain vested in Costco Wholesale and Vendor shall have no rights
or interest in them. Vendor agrees that prior to using Costco Wholesale's marks
or logo in any manner, it will obtain prior written consent and comply with
Costco Wholesale's Guidelines.
28. CHILD/FORCED PRISON LABOR LAWS AND VENDOR CODE OF CONDUCT.
Vendor, by signing the Vendor Agreement, represents and warrants that it and its
subcontractors/suppliers will comply with all applicable local government
regulations regarding minimum wage, living conditions, overtime, working
conditions, child labor laws and the applicable labor and environmental laws.
Vendor further represents and warrants that it and its subcontractors/suppliers
do not use any form of forced prison labor and/or child labor under the age of
14 or the minimum age required by the local government, whichever is older.
Vendor also agrees to comply with Costco Wholesale's Vendor Code of Conduct.
Page 4