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EXHIBIT 10.2
MICROSOFT
LARGE ACCOUNT RESELLER
AGREEMENT
This Microsoft Large Account Reseller Agreement ("Agreement") is entered into as
of the 1st day of January, 2000 (the "Effective Date") between MSLI, GP, having
its principal place of business at 6100 Neil Road, Suite 210, Reno, NV
89511-1137 ("MICROSOFT"), and SOFTWARE SPECTRUM, INC. having its principal place
of business at 2140 Merritt Drive, Garland, TX 75041 ("COMPANY").
1. PURPOSE.
The purpose of this Agreement is to set forth the framework by which MICROSOFT
appoints COMPANY as a non-exclusive Large Account Reseller in the Territory with
the ability to collect orders for License Confirmations and related payments for
Select Software Products from Volume Licensing Customers that have designated
COMPANY in their Enrollment Agreement as their Large Account Reseller.
2. DEFINITIONS
Except as set forth above, all capitalized terms included in this Agreement are
as defined in Schedule A, attached hereto and incorporated herein by reference.
3. ADDENDUM TO THE AGREEMENT
COMPANY's rights and obligations with respect to the authorization to collect
orders for License Confirmations and payments for Select Software Products are
set forth in this Agreement and are subject to the terms of any Addenda which
the parties may subsequently sign. Each Addendum shall be incorporated into and
made a part of this Agreement. In the event of inconsistency, the terms of any
applicable Addendum shall prevail over this Agreement. The terms of this
Agreement, including any Addenda, shall prevail over any provisions in purchase
orders or set-up forms.
4. TERM AND TERMINATION
4.1 TERM
This Agreement shall take effect on the Effective Date and shall continue until
June 30, 2000.
4.2 TERMINATION
4(a) TERMINATION WITHOUT CAUSE
Either party shall have the right to terminate this Agreement at any time,
without cause and without the intervention of the courts, on the delivery of
thirty (30) calendar days' prior written notice. Neither party shall be
responsible to the other for any costs or damages resulting from the termination
of this Agreement under this section.
4(b) IMMEDIATE TERMINATION WITH CAUSE
Microsoft may terminate this Agreement immediately in the event that Company
breaches its confidentiality obligation as set forth in Section 17 below.
Termination shall be effective on the date set forth in the termination notice.
Microsoft Confidential - Disclosure Prohibited MICROSOFT
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4(c) TERMINATION WITH CAUSE
Without prejudice to MICROSOFT's other rights or remedies, MICROSOFT shall have
the right to terminate this Agreement immediately upon written notice if any of
the following events occurs:
(i) If COMPANY breaches any of the material terms or
conditions of this Agreement, and such breach remains unremedied to MICROSOFT's
reasonable satisfaction for thirty (30) calendar days after COMPANY receives
written notice of such breach; or
(ii) If COMPANY makes any assignment for the benefit
of creditors, files a petition in bankruptcy, or is adjudged bankrupt or becomes
insolvent, or is placed in the hands of a receiver. The equivalent of any of
these proceedings or acts, though known and/or designated by some other name or
term in the Territory, shall likewise constitute grounds for termination of this
Agreement.
4.3 RIGHTS UPON EXPIRATION OR TERMINATION
Any amounts which have accrued prior to termination or expiration shall become
immediately due and payable. After the termination or expiration of this
Agreement, MICROSOFT shall retain the right, at its sole discretion, to direct
all of COMPANY's Volume Licensing Customers to order License Confirmations from
and pay amounts due to MICROSOFT or to any Volume Licensing Customer's newly
designated Large Account Reseller, if any. In such an event, COMPANY shall not
under any circumstances be entitled to any portion of, or any compensation for,
the Volume Licensing Customer's next orders and payments or any future orders
and payments. Provided that the Volume Licensing Customer does not designate a
new Large Account Reseller and MICROSOFT does not exercise it rights as
identified above, COMPANY may continue to collect orders for License
Confirmations and collect payments for Select Software Products from its
existing Volume Licensing Customers until their respective volume licensing
agreements expire, provided that COMPANY abides by all terms and conditions of
this Agreement. For purposes of this section, any and all terms and conditions
which govern COMPANY's rights and obligations related to receiving orders and
payments shall survive termination or expiration.
5. COMPANY RIGHTS AND OBLIGATIONS
5.1 SELECT SOFTWARE PRODUCT ORDERS
COMPANY may only collect orders for License Confirmations from Volume Licensing
Customers which are business entities established under the laws of and
located in the Territory. Such Volume Licensing Customers may designate COMPANY
on an Enrollment Agreement as its Large Account Reseller for itself and other
related companies all of which exist in the Territory. COMPANY may also collect
orders for License Confirmations and payments for Select Software Products from
any VLC Affiliates which are authorized to run Select Software Products
according to the terms of any Enrollment Agreements entered into between
MICROSOFT and a Volume Licensing Customer established and located in the
Territory. COMPANY may not collect orders for License Confirmations and payments
for Select Software Products from any Volume Licensing Customers who initiates
an Enrollment Agreement outside of the Territory.
5.2 DOCUMENTATION
(a) COMPANY is authorized to purchase Documentation Components
from MICROSOFT Worldwide Fulfillment for resale only to Volume Licensing
Customers which have selected COMPANY as their Large Account Reseller. COMPANY
must establish a validation process by which COMPANY will ensure that only
Volume Licensing Customers receive Documentation Components. This validation
process must include, at a minimum, verification of the Enrollment Agreement
Number of the Volume Licensing Customer. The validation process must be
documented in writing and be made available to Microsoft upon request. Price
protection is not available for Documentation Components purchased from
Microsoft Worldwide Fulfillment.
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(b) COMPANY may request authorization to return Documentation
Components purchased from Microsoft Worldwide Fulfillment within sixty (60)
calendar days from the date of MICROSOFT's invoice. Upon request, MICROSOFT
will provide COMPANY with a Return Authorization Form which COMPANY must
complete and return to MICROSOFT. MICROSOFT will issue a return authorization
number for Documentation Components meeting return criteria. Documentation
Components must be returned within thirty (30) calendar days of the issuance of
the return authorization number. Freight costs shall be paid by COMPANY.
MICROSOFT shall issue COMPANY a purchase credit in the amount of the authorized
return.
5.3 USE RESTRICTIONS
Nothing in this Agreement authorizes the Large Account Reseller to use Select
Software Products internally or to distribute or otherwise transfer Select
Software Products to any Large Account Reseller Affiliate.
5.4 COMPANY ACCEPTANCE OF ENROLLMENT AGREEMENTS
In order to remain authorized to collect orders for License Confirmations and
purchase Documentation Components from MICROSOFT for resale to its Volume
Licensing Customers, an authorized representative of COMPANY must review and
acknowledge the Volume Licensing Customer's Enrollment Agreements. COMPANY's
signature on the Enrollment Agreement shall constitute COMPANY's agreement to
pay MICROSOFT as set forth in Section 5.7 below for all copies of Select
Software Products made by the Volume Licensing Customer pursuant to such
Enrollment Agreement.
5.5 COMPANY Select Software Product License Price Schedule
The price lists that show the prices that COMPANY must pay to MICROSOFT for any
Volume Licensing Customer orders for License Confirmations (the "Select Software
Price Lists") are available on CP Web. From time to time, MICROSOFT will also
deliver the current Select Software Price Lists to COMPANY through EDI.
MICROSOFT may modify the Select Software Price Lists at any time by providing
thirty (30) calendar days written notice to COMPANY.
5.6 EDI IMPLEMENTATION/ELECTRONIC DATA INTERCHANGE
COMPANY, at its sole cost, shall implement a functioning EDI process which will
exchange the following transaction sets between COMPANY and MICROSOFT: Purchase
Order Acknowledgment (855), Purchase Order Transmission (850), and Invoices
(810).
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5.7 COMPANY'S REPORTING AND/OR ORDERING AND PAYMENT TO MICROSOFT
(a) MICROSOFT SELECT CONSUMPTION REPORTING
Except for Enterprise Agreements, for each COMPANY Enrollment Agreement, COMPANY
shall deliver to MICROSOFT via EDI or any other electronic format specified by
MICROSOFT no later than the fifteenth (15th) calendar day of each calendar
month, a purchase order for License Confirmations ordered by the Volume
Licensing Customer in the immediately previous calendar month. For each
Enterprise Agreement, COMPANY shall deliver to MICROSOFT via EDI or any other
electronic format specified by MICROSOFT, (i) a purchase order for the
Enterprise Package upon execution of such agreement, and (ii) a purchase order
for each additional desktop license ordered or acquired from COMPANY at the
times specified in such agreement. Following receipt of such purchase order,
MICROSOFT shall invoice COMPANY and COMPANY shall be obligated to pay MICROSOFT
according to the Select Software Price List, along with any applicable quarterly
Upgrade Advantage fees. If the Volume Licensing Customer elects to pre-pay any
or all of its Upgrade Advantage commitment, COMPANY shall immediately report
such pre-payment to MICROSOFT, MICROSOFT shall invoice COMPANY immediately
following receipt of such report, and COMPANY shall be obligated to pay
MICROSOFT pursuant to the terms of this Section 5.7.
(b) PAYMENT TERMS
All amounts are due and owing within thirty (30) calendar days of date of
MICROSOFT's invoice. All payments not received by MICROSOFT from COMPANY within
the required time frame may be assessed a finance charge of two percent (2%) of
the invoice amount per month or the legal maximum, which ever is less. COMPANY
shall be obligated to pay MICROSOFT any and all amounts due regardless of
whether COMPANY has received payment from the Volume Licensing Customer. Failure
by COMPANY to meet payment terms may result in a hold by MICROSOFT of all
pending COMPANY orders. COMPANY shall use its best efforts to collect any and
all amounts due from any Volume Licensing Customer. Notwithstanding the
foregoing, if any Enterprise Customer defaults on its payment obligation to
COMPANY for more than ninety (90) calendar days, COMPANY will provide MICROSOFT
with written notice identifying the Enterprise Customer and the amount of the
delinquency. COMPANY shall deliver such notice to MICROSOFT at the address set
forth in Section 19 below. Provided that the Enterprise Customer RDG is unable
or unwilling to pay the amounts due, then COMPANY shall be released from any
payment obligation arising from the delinquent Enterprise Customer's account,
provided that COMPANY provide proof of its best efforts to collect any
outstanding amounts and assigns to MICROSOFT any and all right, title and
interest to the delinquent Enterprise Customer's outstanding payments.
All payments shall be in the form of bank wire transfer or electronic funds
transfer through an Automated Clearinghouse ("ACH") with electronic remittance
detail attached.
Payments shall be remitted to the following account:
MSLI Western Region Collections #842467
Account #375 120 5782
ABA# 1110-0001-2
Bank of America
All payments must be sent to Bank of America at the address indicated above
using the 820 Remittance EDI transaction set or other form of ACH payment with
electronic remittance detail attached. Remittance detail must be received by
Bank of America by 10:00AM Central time/8:00AM Pacific time to ensure same-day
credit to COMPANY's account. COMPANY may not withhold payment or take deductions
prior to MICROSOFT issuing credit for rebates, price adjustments, billing errors
or any other credit memo issued by MICROSOFT.
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(c) REPORT REVISIONS
COMPANY shall use its best efforts to process all adjustments (e.g. ordering
mistakes) to Volume Licensing Customer orders for License Confirmations for of
Select Software Product within ninety (90) calendar days from the original
invoice date. All revised reports and orders must provide detailed back-up as
required by MICROSOFT. MICROSOFT reserves the right to review the circumstance
of all claims submitted more than one hundred eighty (180) calendar days from
the original invoice date, and may determine whether such revised report is
eligible for credit.
5.8 NO OTHER PRODUCT WARRANTIES BY COMPANY
Neither COMPANY nor any of its employees or agents shall have any right to make
any other warranties or promises for the use of Select Software Product which
are not contained in the written warranty document accompanying such product.
COMPANY may, however, give instructions for the use of the Select Software
Product that are contained within End User documentation provided with the
manual or MICROSOFT product literature denoted by a MICROSOFT part number or
authorized in writing by MICROSOFT.
5.9 NO ALTERATIONS OF SELECT SOFTWARE PRODUCT/CDs/WELCOME KITS
COMPANY shall not alter, modify, decompile, reverse engineer any Select Software
Product and shall have no authority to make copies of MICROSOFT diskettes, CDs
or documentation without the prior written consent of MICROSOFT. COMPANY shall
distribute Welcome Kits to Volume Licensing Customers in unopened packages.
5.10 USE OF TRADEMARKS
This Agreement does not constitute a trademark or service mark license. COMPANY
acknowledges and agrees that the Trademarks are the exclusive property of
MICROSOFT or one of its affiliated companies and that COMPANY is not entitled
either by implication or otherwise to any title in the Trademarks. COMPANY shall
not use any Trademarks other than in accordance with this Agreement (including
but not limited to the guidelines set out at http://www.microsoft.com/trademarks
or any such successor web site) or as otherwise permitted in writing from time
to time by MICROSOFT. COMPANY shall use the appropriate trademark symbol "TM" or
"(R)" in a superscript and clearly indicate MICROSOFT'S ownership of the
Trademark(s) whenever the Select Software Product name is first mentioned in any
advertisement, brochure, or other manner in connection with Select Software
Products.
5.11 CREDIT/FINANCIAL STATEMENT
The terms of this Agreement are subject to MICROSOFT approval of COMPANY's
continued credit worthiness. MICROSOFT shall have the right to regularly review
COMPANY's credit status and shall obtain, to the extent reasonably possible,
financial information through publicly available means. If such information is
not reasonably available or is not satisfactory to MICROSOFT, MICROSOFT may
request and COMPANY shall provide sufficient information to allow MICROSOFT to
assess COMPANY's credit worthiness, including but not limited to COMPANY's
Financial Statement.
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5.12 TAXES
(a) COMPANY TAXES
All amounts to be paid by COMPANY to MICROSOFT herein are exclusive of any
federal, state, municipal or other governmental taxes, including income,
franchise, excise, sales, use, gross receipts, value added, goods and services,
property or similar tax, now or hereafter imposed on COMPANY. Such charges shall
be the responsibility of COMPANY and may not be passed on to MICROSOFT, unless
they are owed solely as a result of entering into this Agreement and are
required to be collected from MICROSOFT under applicable law.
(b) BILLING AND COLLECTION
COMPANY will bill, collect and remit sales, use, value added, and other
comparable taxes determined by COMPANY to be due with respect to the collection
and receipt of orders for License Confirmations. MICROSOFT is not liable for any
taxes, including without limitation, income taxes, withholding taxes, value
added, franchise, gross receipt, sales, use, property or similar taxes, duties,
levies, fees, excises or tariffs incurred in connection with or related to
Company's collection and receipt of orders for License Confirmations. COMPANY
takes full responsibility for all such taxes, including penalties, interest and
other additions thereon.
(c) WITHHELD TAXES
If, after a determination by foreign tax authorities, any taxes are required to
be withheld, on payments made by COMPANY to MICROSOFT, COMPANY may deduct such
taxes from the amount owed MICROSOFT and pay them to the appropriate taxing
authority, provided however, that COMPANY shall promptly secure and deliver to
MICROSOFT an official receipt for any such taxes withheld or other documents
necessary to enable MICROSOFT to claim a U.S. Foreign Tax Credit. COMPANY will
make certain that any taxes withheld are minimized to the extent possible under
applicable law.
5.13 COMPLIANCE WITH APPLICABLE LAWS/ANTI-PIRACY
COMPANY shall ensure that it performs its obligations under this Agreement in
accordance with any and all applicable laws and regulations in the Territory.
Additionally, COMPANY shall take all commercially reasonable steps to prevent
unauthorized distribution, duplication or pirating of the License Software
Product.
5.14 SALES TAXES
COMPANY shall either provide MICROSOFT with a bona fide resale certificate for
all License Confirmations delivered through COMPANY by MICROSOFT pursuant to the
terms of this Agreement, or shall pay to MICROSOFT all applicable sales, use or
other excise taxes due on such License Confirmations.
5.15 AGREEMENTS BETWEEN COMPANY AND VOLUME LICENSING CUSTOMERS
COMPANY shall have complete discretion to establish with each Volume Licensing
Customer the pricing and all other terms and conditions regarding COMPANY's
collection of orders for License Confirmations and payments for Select Software
Product from Volume Licensing Customers. The negotiation of these terms between
COMPANY and its Volume Licensing Customers shall not be subject to approval or
review by MICROSOFT in any way.
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5.16 SYSTEMS YEAR 2000 READINESS
COMPANY will use its best efforts to ensure that all systems used to manage and
report orders for License Confirmations and to otherwise fulfill COMPANY's
obligations under this Agreement are Year 2000 compliant. MICROSOFT reserves the
right to monitor and review COMPANY's systems capabilities as is necessary to
ensure COMPANY's ability to perform its obligations under this Agreement during
the transition between the 1999 and 2000 calendar years. Additionally, COMPANY
will provide MICROSOFT with reports on COMPANY's Year 2000 readiness on
MICROSOFT's request.
5.17 ROLE OF THE SELECT PROGRAM ADMINISTRATOR
COMPANY agrees to appoint a representative to serve as COMPANY's Volume
Licensing Program Administrator. COMPANY agrees to promptly make that
individual, as well as COMPANY's other sales employees, available for training
on the Microsoft Volume Licensing Programs and on the licensing policies related
to such Select Software Products at such times and places as MICROSOFT
reasonably requests. The individual appointed by COMPANY as its Select Program
Administrator shall be an individual generally knowledgeable of Select Software
Products and of MICROSOFT's Volume Licensing Programs. The Select Program
Administrator shall be responsible for administering all of COMPANY's Volume
Licensing Customer billings and transactions, contract compliance, general
administration of COMPANY's Volume Licensing Customers, disseminating all
program information as necessary within COMPANY's organization, and for working
with the Microsoft Select Account Manager (or local MICROSOFT Contact) in regard
to any problems relevant to a given Volume Licensing. COMPANY's Select Program
Administrator shall be:
Tonya Gonzales
Software Spectrum, Inc
2140 Merritt Drive
Garland, TX 75041
(972) 864-5336
COMPANY shall provide MICROSOFT with at least ten (10) days advance written
notice of any change in the individual serving as its Select Program
Administrator.
5.18 ENROLLMENT OF NEW VOLUME LICENSING CUSTOMERS
COMPANY's solicitation of new Volume Licensing Customers shall be on such terms
and conditions as MICROSOFT specifies from time to time. MICROSOFT reserves the
right to accept or reject in its sole discretion any proposed customer.
5.19 COMPANY'S REPRESENTATIONS AND WARRANTIES
COMPANY hereby represents and warrants that COMPANY shall:
(a) Have email availability, Internet access, and an active
VLOR account as is necessary to perform COMPANY's obligations pursuant to this
Agreement;
(b) Use its best efforts to service and support its Volume
Licensing Customers and will promptly inform the appropriate Microsoft Volume
Licensing contact of any difficulties it encounters in servicing its Volume
Licensing Customers;
(c) Not alter in any way or form the Select Software Products,
their packaging, or any License Confirmation;
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(d) Deliver the Documentation Components, Select CDs
containing the Select Software Products and other program materials and
information, and Welcome Kits only to the Volume Licensing Customer MICROSOFT
identifies on the outside of the Welcome Kit; and
(e) Promptly inform MICROSOFT of any known or suspected
violations by a Volume Licensing Customer of the terms and conditions of the
Customer Agreements and Enrollment Agreements.
5.20 COMPANY TERMINATION OF ENROLLMENT AGREEMENT/FORM
At anytime during the Term, COMPANY shall be able to terminate its rights and
obligations related to any Enrollment Agreement currently administered by
COMPANY. In order for such termination to be effective, COMPANY must notify
MICROSOFT and the affected Volume Licensing Customer in writing of its desire to
terminate its rights and obligations. Such notification shall include the Volume
Licensing Customer's name and current contact information, the Enrollment
Agreement Number, and date of execution. All notification shall be sent via a
courier service able to track package delivery. COMPANY's rights and obligations
shall terminate thirty (30) calendar days from the date of the required notice.
5.21 RELATIONSHIPS WITH GOVERNMENT ENTITIES
COMPANY may receive orders for License Confirmations for Select Software
Products from agencies of the United States government, state governments of the
United States of America and their political subdivisions under provided that
COMPANY enters into one or more Government Agreements, the form of which has
been approved in advance by MICROSOFT. COMPANY is authorized to enter into the
Government Agreements and provide the services set forth in such agreements.
6. MICROSOFT OBLIGATIONS
6.1 ASSISTANCE WITH REPORTING
Upon COMPANY'S written request, MICROSOFT shall use reasonable efforts to assist
COMPANY in data reporting, and will work with COMPANY's Information Management
department to facilitate the data reporting process.
6.2 NO WARRANTIES FOR PRODUCT NOT MANUFACTURED BY MICROSOFT
MICROSOFT makes no warranties as to items distributed under a third party name,
copyright, trademark or tradename which may be included within the package of a
Select Software Product delivered on any CD as provided hereunder.
6.3 REPORTING/ELECTRONIC DATA INTERCHANGE
COMPANY shall provide weekly sales and inventory reporting, in such format as
MICROSOFT shall instruct, in a timely and accurate manner during the Term. Such
reporting shall be submitted to MICROSOFT in accordance with the Electronic Data
Interchange (EDI) Guidelines.
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6.4 RECORDS AND AUDITS
During the duration of any Microsoft audit rights set forth in this section,
COMPANY agrees to keep all proper records and books of account relating to
performance of its obligations under this Agreement. During the Term and for a
period of two (2) years following its termination or expiration, MICROSOFT or
its designated representative, at its own cost, may audit the applicable books,
records and operations of COMPANY as is reasonable to verify COMPANY's
compliance with the terms of this Agreement. COMPANY shall promptly correct any
errors and omissions disclosed by such audit. Any audit will be conducted during
COMPANY's normal business hours in such a manner as not to unreasonably
interfere with COMPANY's normal business activities. If any complete financial
audit uncovers material discrepancies, COMPANY shall bear the out of pocket
costs for the audit. For purposes of this Section, "material discrepancies"
shall mean a discrepancy of five hundred thousand U.S. dollars (US$500,000) or
more in monthly revenue or sales reporting. Additionally, MS or its designated
representative, at its own cost, may audit any portion of COMPANY's books,
records, and operations as is reasonable to verify COMPANY's compliance with the
specific terms, policies and procedures of any addenda to this agreement.
7. COMPANY AND MICROSOFT OBLIGATIONS
7.1 DELIVERY OF SELECT CDs.
Within fifteen (15) calendar days of the full execution of any Enrollment
Agreement or MICROSOFT's approval of a given Enrollment Agreement, MICROSOFT
agrees to deliver to COMPANY a Select CD along with any other applicable
materials (the "Welcome Kit"). MICROSOFT will deliver the Welcome Kit to COMPANY
in a custom package specifically marked with the name of the appropriate Volume
Licensing Customer, the Volume Licensing Customer's Enrollment Agreement Number
and any special conditions relevant to the named Volume Licensing Customer.
COMPANY must deliver the Welcome Kit to its Volume Licensing Customer in order
for such customers to reproduce and run the Select Software Products according
to the Volume Licensing Customers' Agreement. From time to time, during the
Term, MICROSOFT will provide COMPANY with additional Select CDs containing
upgraded copies of the Select Software Products covered by a Volume Licensing
Customer's Enrollment Agreement. COMPANY agrees to immediately deliver all CDs
and any additional MICROSOFT supplied program information and materials to the
named Volume Licensing Customer.
7.2 RESERVATION OF RIGHTS
MICROSOFT expressly reserves the right at any time during the Term to terminate
any Volume Licensing Customer's status as a Volume Licensing Customer in the
event such customer fails to comply with the terms of the Customer Agreement.
MICROSOFT agrees to promptly notify COMPANY of the termination of any Volume
Licensing Customer to whom COMPANY collects orders for License Confirmations and
payments for Select Software Products. Following such a notice, COMPANY shall
immediately cease collecting orders for License Confirmations, delivery of
Select CDs and any additional program information and materials to the
terminated Volume Licensing Customer. Termination shall not, however, affect the
Volume Licensing Customer's obligation to file the next required order/report
and MICROSOFT's right to invoice COMPANY in regard to such order. If MICROSOFT
terminates a given Volume Licensing Customer, COMPANY shall not have any claim
against MICROSOFT for damages or lost profits resulting from such termination.
COMPANY shall, however, be entitled to invoice the Volume Licensing Customer for
the License Confirmations that the Volume Licensing Customer ordered in its
final order.
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7.3 ESSENTIAL ELEMENT
Both COMPANY and MICROSOFT acknowledge that this Agreement is essential to any
agreement it enters into with a Volume Licensing Customer. Except as is
specifically provided in Section 4.3 related to COMPANY's right to collect any
outstanding payment following termination of this Agreement, COMPANY's rights to
collect orders and payments for License Confirmations, and purchase and deliver
Welcome Kits, Select CDs and/or any additional program information and materials
are conditional upon this Agreement being in full force and effect. COMPANY
acknowledges further that, if and when it is the subject of a bankruptcy filing
(under any Chapter of 11 United States Code Section 101 et seq. including any
future amendments), then assumption of any contract with a Volume Licensing
Customer is conditional upon the assumption of this Agreement.
7.4 PRODUCT WARRANTY; LIMITATION OF LIABILITY
(a) MICROSOFT warrants its Select Software Product to End
Users as defined in the written limited warranty document accompanying each
product. All replacement Select Software Product is delivered subject to the
terms of the MICROSOFT limited product warranty. THE ABOVE LIMITED WARRANTIES
ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, OR STATUTORY, INCLUDING
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
TITLE, AND NON-INFRINGEMENT OR ANY OTHER OBLIGATIONS OR LIABILITIES ON
MICROSOFT'S PART.
(b) MICROSOFT SHALL NOT BE LIABLE FOR ANY INDIRECT,
CONSEQUENTIAL, OR INCIDENTAL DAMAGES (INCLUDING DAMAGES FOR LOSS OF BUSINESS
PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE)
ARISING OUT OF THE USE OR INABILITY TO USE ANY SELECT SOFTWARE PRODUCT EVEN IF
MICROSOFT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(c) IN ANY CASE, THE LIABILITY OF MICROSOFT (i) UNDER ANY
PROVISION OF THIS AGREEMENT; (ii) FOR ANY DAMAGES CAUSED BY A PROGRAM DEFECT OR
FAILURE IN ANY SELECT SOFTWARE PRODUCT OR (iii) ARISING FROM A COURT OF PROPER
JURISDICTION HOLDING ANY OF THE ABOVE WARRANTIES OR DISCLAIMERS OF WARRANTIES
INADEQUATE OR INVALID SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY COMPANY TO
MICROSOFT UNDER THIS AGREEMENT. MICROSOFT's LIMITATION OF LIABILITY IS
CUMULATIVE WITH ALL OF MICROSOFT's EXPENDITURES BEING AGGREGATED TO DETERMINE
SATISFACTION OF THE LIMIT. THE EXISTENCE OF CLAIMS OR SUITS AGAINST MORE THAN
ONE SELECT SOFTWARE PRODUCT DISTRIBUTED UNDER THIS AGREEMENT WILL NOT ENLARGE OR
EXTEND THE LIMIT. COMPANY RELEASES MICROSOFT FROM ALL OBLIGATIONS, LIABILITY,
CLAIMS OR DEMANDS IN EXCESS OF THE LIMITATION.
7.5 SEMESTER PROGRAMS -
Each Semester, MICROSOFT may allow COMPANY to participate in programs which
provide the opportunity to earn marketing funds and rebates. COMPANY's
participation in such programs shall be governed by COMPANY'S then current
Microsoft Rebate and Marketing Fund Agreement and Microsoft's Marketing Fund
Guidelines or the Microsoft Rebate Program Guidelines, respectively, as such may
be promulgated and modified by MICROSOFT, in its sole discretion, from time to
time.
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8. DEFENSE OBLIGATIONS
8.1 BY MICROSOFT
(a) DUTY TO DEFEND
(i) MICROSOFT agrees to defend COMPANY against, and
pay the amount of any adverse final judgment (or settlement to which MICROSOFT
consents) resulting from any Infringement Claims; provided that COMPANY promptly
notifies MICROSOFT in writing of the Infringement Claim, specifies the nature of
such claim and the relief sought, and tenders the entire defense of the
Infringement Claim to MICROSOFT. COMPANY shall provide reasonable assistance in
the defense of all Infringement Claims.
(ii) MICROSOFT additionally agrees to defend COMPANY
against, and pay the amount of any adverse final judgment (or settlement to
which MICROSOFT consents) resulting from any Patent Claims; provided that
COMPANY promptly notifies MICROSOFT in writing of the Patent Claim, specifies
the nature of such claim and the relief sought and MICROSOFT accepts the defense
of the Patent Claim. Within thirty (30) calendar days of MICROSOFT's receipt of
COMPANY's notice, MICROSOFT shall notify COMPANY in writing of MICROSOFT's
acceptance or rejection of the defense of the Patent Claim. If MICROSOFT accepts
defense of the Patent Claim, COMPANY shall tender the entire defense of such
claim to MICROSOFT. MICROSOFT's acceptance or rejection of a Patent Claim shall
be based on MICROSOFT's discretion which shall be reasonable. COMPANY shall
provide reasonable assistance in the defense of all Patent Claims.
(b) EXCEPTIONS TO DUTY
MICROSOFT shall have no liability for any claim, including any intellectual
property infringement claim (including any Infringement Claim or Patent Claim)
based on COMPANY's use of any Mark after MICROSOFT's notice that COMPANY should
cease use of such Mark due to such a claim. All claims described in this Section
8.1(b) shall be deemed Company Claims for which COMPANY shall have those
obligations set forth in Section 8.2 below.
8.2 BY COMPANY
COMPANY shall defend MICROSOFT, its subsidiaries, and affiliated companies from
and against any claims, losses, and damages relating to any Company Claim.
COMPANY's obligation to defend MICROSOFT shall only apply provided that COMPANY
is immediately notified in writing of any such Company Claim. At MICROSOFT's
sole option, MICROSOFT may participate in the selection of counsel, defense and
settlement of any Company Claims covered by this Section 8.2, or may tender sole
control over the defense or settlement of the Company Claim to COMPANY. If
MICROSOFT chooses to participate in the selection of counsel, defense and
settlement of such claims, the parties shall work together in good faith to
reach decisions which are mutually acceptable to both parties. MICROSOFT shall
provide reasonable assistance in the defense of all Company Claims.
9. INSURANCE
Throughout the Term and for 30 days thereafter, each party shall maintain, at
its sole expense, Commercial General Liability Insurance written on an
Occurrence Form, with policy limits of not less than Three Million Dollars
($3,000,000) combined single limit each occurrence for personal injury
(including bodily injury and death) and property damage which may arise from or
in connection with the performance of each party's obligations hereunder or out
of any negligent act or omission of the applicable party, its officers,
directors, agents, or employees. Each party shall provide proof of its
compliance with this section upon the other party's request. Notwithstanding the
foregoing, MICROSOFT shall have the right to self-insure.
Page 11
MSLI, GP
Large Account Reseller
Agreement MICROSOFT
<PAGE> 12
10. EXPORT RESTRICTIONS
COMPANY agrees that COMPANY and, as applicable, its Resellers will not export or
re-export Product to any country, person, or entity subject to U.S. export
restrictions. COMPANY specifically agrees not to export or re-export Product (i)
to any country to which the U.S. embargoes or restricts the export of goods or
services, which as of March 31, 1999, includes, but is not necessarily limited
to, Cuba, Iran, Iraq, Libya, North Korea, Sudan, Syria, and the Federal Republic
of Yugoslavia (Serbia and Montenegro) or to any national of any such country who
COMPANY knows intends to transmit or transport the products back to such
country; (ii) to any person or entity that COMPANY or, as applicable, its
Resellers (if applicable) know will utilize Select Software Product in the
design, development or production of nuclear, chemical or biological weapons; or
(iii) to any person or entity that has been prohibited from participating in
U.S. export transactions by any federal agency of the U.S. government.
11. DELAY IN PERFORMANCE
If as a result of fire, casualty, act of God, riot, war, labor dispute,
government regulation, or decree of any court or any other event beyond the
control of COMPANY or MICROSOFT, either of the parties shall be unable to
perform its obligations hereunder, such inability shall not constitute a breach
of this Agreement, and such obligations shall be performed as soon as the cause
of the inability ceases or is removed. Strikes or other labor difficulties which
are not capable of being terminated on terms acceptable to the party affected
shall not be considered circumstances within the control of such party.
12. NO WAIVER
None of the provisions of this Agreement shall be deemed to have been waived by
any act or acquiescence on the part of MICROSOFT, COMPANY or their respective
agents or employees, but may be waived only by an instrument in writing signed
by an authorized officer of the waiving party. No waiver of any provision of
this Agreement shall constitute a waiver of any other provision or of the same
provision on another occasion.
13. NO PARTNERSHIP OR AGENCY
Nothing in this Agreement shall be deemed to create or constitute a partnership,
joint venture, franchise, agency, or contract of employment between MICROSOFT
and COMPANY.
14. ATTORNEY'S FEES; GOVERNING LAW
In the event an action is commenced to enforce a party's rights under this
Agreement, the prevailing party (as determined by the court) in such action
shall be entitled to recover its reasonable costs and attorneys' fees. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Washington. COMPANY consents to jurisdiction and venue in King
County, Washington.
15. ENTIRE AGREEMENT/MODIFICATION
This Agreement and all attached Schedules constitute the entire agreement
between MICROSOFT and COMPANY, and supersedes and terminates any and all prior
agreements or contracts, written or oral, entered into between the parties
relating to the subject matter hereof. Any representations, promises, or
conditions in connection therewith not in writing signed by both parties shall
not be binding upon either party. This Agreement shall control any provisions in
COMPANY's purchase orders which are inconsistent with this Agreement. Any
changes or modifications to this Agreement must be made in writing and with the
mutual agreement of the parties.
MSLI, GP Page 12
Large Account Reseller
Agreement MICROSOFT
<PAGE> 13
16. U.S. GOVERNMENT RIGHTS
All Products provided to the U.S. Government pursuant to solicitations issued on
or after December 1, 1995, are provided with commercial license rights and
restrictions described elsewhere herein. All Products provided to the U.S.
Government pursuant to solicitations issued prior to December 1, 1995 are
provided with RESTRICTED RIGHTS as provided for in FAR, 48 C.F.R. 52.227-14
(June 1987) or DFAR, 48 CFR 252.227-7013 as applicable. COMPANY shall be
responsible for ensuring that all Products are marked with the "Rights" legend.
Manufacturer is Microsoft Corporation, One Microsoft Way, Redmond, WA
98052-6399.
17. CONFIDENTIALITY
17.1 COMPANY expressly undertakes to retain in confidence the terms and
Agreement and any applicable Addenda and all information and know-how
transmitted to it by make no use of such information and know-how except under
the terms and during the existence of this COMPANY shall guarantee and ensure
its employees' compliance with this paragraph. COMPANY's under this paragraph
shall survive any termination of this Agreement and shall extend to the earlier
of the information is public domain or five (5) years following the termination
of this Agreement. This not prohibit the parties from disclosing such
information as is specifically required by any authorities. Notwithstanding the
foregoing, COMPANY may disclose confidential information in any judicial or
other governmental order or request, provided that COMPANY shall MICROSOFT in
writing upon its receipt of such order or request and shall assist MICROSOFT as
is seeking any protective order or its equivalent or in limiting the scope of
disclosure of any Confidential Information.
17.2 During the Term and for three (3) years thereafter, COMPANY
expressly undertakes confidence the terms and conditions of all executed
Customer Agreements and/or Enrollment Agreement CUSTOMER disclose the terms and
conditions of any Customer Agreement or Enrollment Agreement shall immediately
terminate. CUSTOMER shall guarantee and ensure its employees' this paragraph.
17.3 During the Term and for three (3) years thereafter, COMPANY
expressly undertakes confidence the terms and conditions of any and all rebate
and marketing fund programs made COMPANY. Should CUSTOMER disclose the terms and
conditions of any rebate or marketing fund Agreement shall immediately
terminate. CUSTOMER shall guarantee and ensure its employees' this paragraph.
18. NO ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective and assigns, provided that COMPANY may not assign
its rights or obligations under this Agreement without the prior written consent
of MICROSOFT. MICROSOFT may assign this Agreement or thereof, to any MICROSOFT
related company or business entity.
MSLI, GP Page 13
Large Account Reseller
Agreement MICROSOFT
<PAGE> 14
19. NOTICES
Except as otherwise provided herein, all notices required or contemplated by
this Agreement shall be in writing, delivered by U.S. certified mail (return
receipt requested), or via overnight courier (e.g., Federal Express, or DHL),
and addressed as follows:
<TABLE>
<S> <C>
If to MICROSOFT: MSLI, GP
6100 Neil Road, Suite 210
Reno, NV 89511-1137
Attn.: LAR Operations
With cc to: Law and Corporate Affairs (Retail) and Channel Strategy
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399
If to COMPANY:
Software Spectrum, Inc
2140 Merritt Drive
Garland, TX 75041
Attn: Robert D. Graham
</TABLE>
Such notices shall be deemed given three (3) business days after being deposited
in the United States mail or one business day after being delivered with an
overnight carrier or by electronic mail.
20. SEVERABILITY
In the event that any provision of this Agreement is found invalid or
unenforceable pursuant to judicial decree or decision, the remainder of this
Agreement shall remain valid and enforceable according to its terms. The parties
intend that the provisions of this Agreement be enforced to the fullest extent
permitted by applicable law. Accordingly, the parties agree that if any
provisions are deemed not enforceable, they shall be deemed modified to the
extent necessary to make them enforceable.
21. SURVIVAL
SECTIONS 2, 4.3, 5.7(c), 5.12, 5.13, 5.19, 6.4, 7.4, 8, 9, 10, 14, 17, 19 and 21
shall survive any termination of this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement on the dates
indicated below. This Agreement is not binding until executed by MICROSOFT.
MSLI, GP ("MICROSOFT") SOFTWARE SPECTRUM, INC.
("COMPANY")
By: By: /s/ Robert D. Graham
--------------------------------- --------------------------------
Robert D. Graham
----------------------------------- -----------------------------------
Name (please print) Name (please print)
Vice President
----------------------------------- -----------------------------------
Title, An Authorized Representative Title, An Authorized Representative
1/31/00
----------------------------------- -----------------------------------
Date Date
MSLI, GP Page 14
Large Account Reseller
Agreement MICROSOFT
<PAGE> 15
SCHEDULE A
DEFINED TERMS
"COMPANY CLAIM" means any default, breach or alleged breach of
COMPANY's obligations, promises, representations, warranties or agreements
relating to the Agreement.
"CUSTOMER AGREEMENTS" mean the applicable License Agreement, License
Confirmation or Product Use Rights, Master Agreement, Enterprise Agreement,
Enrollment Agreement, Government Agreement and any Program Description.
"COMPANY ENROLLMENT AGREEMENT" means any Enrollment Agreement under
which COMPANY is designated as the Large Account Reseller.
"CP WEB" means the secure website which company may access to obtain
the current Select Software Product Price List.
"DISTRIBUTOR" means any business entity which has entered into a
Microsoft Channel Agreement which includes a Distributor Addendum to the
Microsoft Channel Agreement with Microsoft Corporation.
"DOCUMENTATION COMPONENTS" means the supplemental disk sets and Select
Software Product documentation available from Microsoft World Wide Fulfillment
or such other fulfillment source that MICROSOFT may designate.
"ELECTRONIC DATA INTERCHANGE" or "EDI" means the ANSI-ASCII X.12
standard, adopted by CompTIA, by which COMPANY shall submit sales reporting to
MICROSOFT.
"END USER" shall mean the ultimate consumer of any Microsoft product.
"ENROLLMENT AGREEMENT" means the Microsoft Select Master Agreement
(any version), the Microsoft Select Enterprise Agreement, the Microsoft Select
Enrollment Agreement the Microsoft Educational Select Enrollment Agreement, the
Outsourcer Agreement, any Enrollment Forms relevant to any of the previous named
agreements, and any successor agreement even if identified by a different name,
which is entered into by a Volume Licensing Customer and MICROSOFT.
"ENTERPRISE AGREEMENT" means the Microsoft Select Enterprise Agreement
and any successor agreement even if identified by a different name, in such form
as MICROSOFT will determine.
"AGREEMENT NUMBER" means the number MICROSOFT assigns to any fully
signed Enrollment Agreement.
"ENTERPRISE CUSTOMER" means any business entity or company having a
valid Enterprise Enrollment Agreement or a Microsoft Select Enterprise Agreement
or such successor agreement even if identified by a different name.
"FINANCIAL STATEMENT" means a Balance Sheet as of the last day of the
calendar quarter, and an Income Statement and Statement of Cash Flows for the
quarter and year-to-date, prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). Any deviation from GAAP in the quarterly
statements shall be clearly noted. These statements must be signed by an officer
of COMPANY as being representative of the books and accounts of COMPANY.
"GOVERNMENT AGREEMENTS" means the Microsoft Government Select Master
Agreement, the Microsoft Government Select Enrollment Agreement, the Microsoft
Government Enterprise Select Agreement and any such successor agreements which
may be known by different names. All such Government Agreements will be entered
into between COMPANY and the applicable Federal, state or local government
entities.
MSLI, GP Page A-1
Large Account Reseller
Agreement MICROSOFT
<PAGE> 16
"INFRINGEMENT CLAIM" means any allegation against the COMPANY that the
Select Software Products or Marks infringes any United States copyright or
trademark of a third party.
"LARGE ACCOUNT RESELLER" means any reseller that MICROSOFT has
authorized to collect and receive orders for License Confirmations and payments
for Select Software Products from Volume Licensing Customers.
"LARGE ACCOUNT RESELLER AFFILIATE" means any entity which owns,
controls, is owned or controlled by, or under common ownership or control with
the Large Account Reseller. For the purposes of this Agreement, an entity is
"controlled" by another if that other company or legal entity, either directly
or through its control of another company or legal entity: (i) holds the
majority of voting rights in it; (ii) is a member of it and has the right to
appoint or remove a majority of its board of directors; or (iii) is a member of
it and controls alone or under an agreement with other shareholders or members,
the majority of the voting rights in it.
"LICENSE AGREEMENT" means the license agreement attached to the 3.x
Enrollment Agreement.
"LICENSE CONFIRMATIONS" means the authorization which MICROSOFT
provides to the Volume Licensing Customer which confirms the Volume Licensing
Customer's right to run Select Software Product.
"MARKS" means the Trademarks (defined below) or any and all copyrights
MICROSOFT may own.
"MASTER AGREEMENT" means the Microsoft Select Master Agreement, the
Microsoft Educational Select Master Agreement, the Microsoft Enterprise Select
Agreement, and any successor agreement even if identified by a different name,
which is signed by MICROSOFT and a Volume Licensing Customer.
"OUTSOURCER AGREEMENT" means the Microsoft Select Outsourcer
Enrollment Agreement which authorizes a third party outsourcer to receive Select
Software Products under the terms of a specific Volume Licensing Customer's
Master Agreement for the sole purpose of leasing, sublicensing, or otherwise
making Select Software Products available to such Volume Licensing Customer.
"OUTSOURCER CUSTOMER" means the business entity which has signed an
Outsourcer Agreement.
"PATENT CLAIM" means any third party claim or allegation against the
COMPANY that the Select Software Products infringe any United States patent.
"PRODUCT USE RIGHTS" means the statement attached to the version 4.x
Microsoft Select Master Agreement as Addendum A, or any subsequent version
thereof released and provided to the entity that signs any Microsoft Select
Master Agreement by or on behalf of MICROSOFT that identifies special terms
and conditions under which us of each particular Select Software Product is
subject.
"SELECT CD" means the compact disk which contains copies of the Select
Software Product which Volume Licensing Customers use to install copies of the
Select Software Product they choose to license.
"SELECT MASTER AGREEMENTS" means the Microsoft Select Master Agreement
and the Microsoft Educational Select Master Agreement, and any successor
agreement even if identified by a different name, which is signed by MICROSOFT
and a Volume Licensing Customer.
"SELECT SOFTWARE PRODUCT" means the Microsoft software products which
MICROSOFT will designate from time to time, that may be reproduced and run by
Volume Licensing Customers under any form of Enrollment Agreement, or
Government Agreement, excluding Documentation Components.
"SEMESTER" means the six month periods which run from July 1 through
December 31, and from January 1 through June 30. For purposes of this
Agreement, there will be only one Semester during the Term.
"TERM" means the term of this Agreement which is specified in Section
4.1 of this Agreement.
MSLI, GP Page A-2
Large Account Reseller
Agreement MICROSOFT
<PAGE> 17
"TERRITORY" means the geographic boundaries of Canada and the United
States of America, excluding all United States territories, possessions, or
protectorates.
"TRADEMARKS" means the trademark and trade name "Microsoft", and all
trademarks and tradenames derived therefrom, and the trademarks used in
association with all Select Software Products or which are set out at
http://www.Microsoft.com/trademarks (or such other successor site), as may be
amended from time to time by MICROSOFT.
"UPGRADE ADVANTAGE" means the Select program offering, which allows an
enrolling Volume Licensing Customer, for a fee, to have the ability to run the
most current version of any Select Software Product which the Volume Licensing
Customer has previously licensed under its Enrollment Agreement.
"VOLUME LICENSING PROGRAMS" means the Microsoft's Select and
Enterprise Licensing programs, and any other successor volume licensing programs
even if they are known by a different name.
"VOLUME LICENSING CUSTOMER" means any business entity, identifiable
division, business unit or office location which has the ability to run Select
Software Products under the terms of any form of Enrollment Agreement, or
Government Agreement.
"VOLUME LICENSING PROGRAM ADMINISTRATOR" means the individual
appointed by COMPANY to act as COMPANY's primary contact with respect to the
Microsoft Volume Licensing Programs.
"VLC AFFILIATES" means the affiliate business entities identified in
each Volume Licensing Customer's Enrollment Agreement.
Page A-3
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Large Account Reseller
Agreement
<PAGE> 18
AMENDMENT NO. 1 TO THE
MICROSOFT
LARGE ACCOUNT RESELLER
AGREEMENT
This Amendment No. 1 ("Amendment"), entered into as of this 1st day of July,
2000, amends that certain Microsoft Large Account Reseller Agreement
("Agreement") between MSLI, G.P. ("MICROSOFT") having its principal place of
business at 6100 Neil Road, Suite 210, Reno, NV 89511-1137 and SOFTWARE
SPECTRUM, INC. ("COMPANY") having its principal place of business at 2140
MERRITT DRIVE, GARLAND, TX 75041. The Agreement is hereby amended as follows:
1. SECTION 4.1, TERM, IS REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
"4.1 TERM
This Agreement shall take effect on the Effective Date and shall continue until
June 30, 2001."
2. SECTION 5.7(b), PAYMENT TERMS, THIRD PARAGRAPH IS REPLACED IN ITS
ENTIRETY WITH THE FOLLOWING:
"Payments shall be remitted to the following account:
MSLI Western Region Collections #842467
Account #375 120 5782
ABA# 1110-0001-2
Bank of America
Or to a third party designated by MICROSOFT in writing. All payments must be
sent to Bank of America at the address indicated above using the 820 Remittance
EDI transaction set or other form of ACH payment with electronic remittance
detail attached. Remittance detail must be received by Bank of America by
10:00AM Central time/8:00AM Pacific time to ensure same-day credit to COMPANY's
account. COMPANY may not withhold payment or take deductions prior to MICROSOFT
issuing credit for rebates, price adjustments, billing errors or any other
credit memo issued by MICROSOFT."
3. SECTION 5.19(a) IS REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
"(c) Have email availability, Internet access, and an active CPWeb
account as is necessary to perform COMPANY's obligations pursuant to this
Agreement;"
IN WITNESS WHEREOF, the parties have signed this amendment on the date
indicated below. This Amendment is hereby made part of the Agreement. All terms
and conditions of the Agreement not modified herein shall remain in full force
and effect. This Amendment is not binding until executed by MSFT.
MSLI, GP ("MICROSOFT") SOFTWARE SPECTRUM, INC.
("COMPANY")
By: By: /s/ ROBERT D. GRAHAM
------------------------------ ------------------------------
Robert D. Graham Vice President
--------------------------------- ---------------------------------
Name (please print) Title Name (please print) Title
July 19,2000
--------------------------------- ---------------------------------
Date Date
MICROSOFT
