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USA Technologies Inc – ‘SB-2’ on 8/2/96 – EX-10.26

As of:  Friday, 8/2/96   ·   Accession #:  950116-96-711   ·   File #:  333-09465

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/02/96  USA Technologies Inc              SB-2                  21:399K                                   St Ives Financial/FA

Registration of Securities by a Small-Business Issuer   —   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2        Registration of Securities by a Small-Business        88    373K 
                          Issuer                                                 
 2: EX-3        Exhibit 3.1.6                                          3     14K 
 3: EX-4        Exhibit 4.1                                           25     60K 
 4: EX-4        Exhibit 4.2                                            4     20K 
 5: EX-5        Exhibit 5.1                                            2±    12K 
 6: EX-10       Exhibit 10.1.2                                         2     12K 
11: EX-10       Exhibit 10.14.2                                        3     12K 
12: EX-10       Exhibit 10.15.1                                        3     16K 
13: EX-10       Exhibit 10.18.1                                        6     29K 
 7: EX-10       Exhibit 10.2.1                                         2     12K 
15: EX-10       Exhibit 10.28                                         10     26K 
16: EX-10       Exhibit 10.29                                          7     31K 
 8: EX-10       Exhibit 10.3.1                                         2     12K 
17: EX-10       Exhibit 10.30                                         10     27K 
18: EX-10       Exhibit 10.31                                          7     31K 
19: EX-10       Exhibit 10.32                                          2     16K 
20: EX-10       Exhibit 10.33                                          2     13K 
 9: EX-10       Exhibit 10.6.1                                         6     30K 
10: EX-10       Exhibit 10.7.1                                         6     30K 
14: EX-10.26    Remarketing Agreement                                  9     51K 
21: EX-23       Exhibit 23.1                                           1      8K 


EX-10.26   —   Remarketing Agreement
Exhibit Table of Contents

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11st Page   -   Filing Submission
4Products
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Exhibit 10.26 REMARKETING/INTEGRATOR AGREEMENT Remarketer/Integrator Name: USA Technologies, Inc. Remarketer/Integrator Address: 1265 Drummer Lane, Ste. 306 Wayne, PA 19087 Agreement Number: 960111 Customer Number: 2857385 Commencement Date: Date of Execution by Dell Marketing L.P. Annual Commitment: Two Million Dollars and up to Five Millon Dollars (2M-5M) Remarketer/Integrator Liaison: George Jensen Dell Liaison: Stan Slimp Discounts: Product Class Commercial ------------- ---------- A 9% B 12% C 16% N 9% O 20% Ltd: 2% Dell Marketing L.P. ("Dell"), located at 2214 W. Braker Ln., Suite D, Austin, TX 78758, and the entity named above ("Remarketer/Integrator") hereby agree on the terms and conditions that apply to purchases by Remarketer/Integrator of products from Dell and their remarketing. These terms and conditions are set forth in the Remarketer/Integrator Agreement Terms and Conditions, attached hereto as Schedule A, and Warranties, attached hereto as Schedule B. The schedules and this page form the entire and only statement of the terms between Remarketer/Integrator and Dell (the "Agreement"). THE PERSON SIGNING FOR THE REMARKETER/INTEGRATOR CERTIFIES AUTHORIZATION TO SIGN THIS AGREEMENT, AND ACKNOWLEDGES THAT THIS AGREEMENT HAS BEEN READ AND UNDERSTOOD. DELL MARKETING L.P. USA TECHNOLOGIES, INC. /s/ ROBERT A. KUSHWARA /s/ GEORGE R. JENSEN, JR. -------------------------- --------------------------------- Signature Signature Robert A. Kushwara George R. Jensen, Jr. -------------------------- --------------------------------- Manager, Contracts & Proposals Name & Title February 8, 1996 January 31, 1996 -------------------------- --------------------------------- Date Date
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SCHEDULE A REMARKETER/INTEGRATOR AGREEMENT TERMS AND CONDITIONS Relationship: Dell Appoints Remarketer/Integrator as a "Dell Authorized Remarketer/Integrator" for the products Dell sells to Remarketer/Integrator and its customers hereunder ("Products"), and Remarketer/Integrator accepts the appointment. All purchase and remarketing of Products by Remarketer/Integrator will be in accordance with the terms and conditions of this Agreement. Remarketer/Integrator certifies that the business it will derive from Products will be based on either value added remarketing, or on integration, in accordance with this section. Remarketer/Integrator may acquire Products under this Agreement for internal use, but only in connection with permitted marketing activities. Remarketer/Integrator may present other marketing opportunities to Dell, and Dell may, but is in no way obligated to, consider waiving the provisions of this section. Value added remarketing is adding product content value to Products or integrating them into or with other products or services, and then marketing the resultant value added products or services. Except for additions to a customer's installation, Remarketer/Integrator will not remarket Products by themselves, or market Products when the only added value is installation of devices that Dell markets as part of its systems, such as disk and tape drives, and monitors. Remarketer/Integrator must remarket the resultant products and services directly to end users and end users through third party financing. Remarketer/Integrator may not use distributors, other remarketers, sales agents or others without Dell's prior written consent. The products the Remarketer/Integrator markets as an integrator must be integrated and sold, licensed or leased in association with other products and/or services. Within the conditions established in this Agreement and Dell's warranty statements, the prices, terms and conditions for the marketing by Remarketer/Integrator of Products is at the discretion of Remarketer/Integrator. Remarketer/Integrator may market products considered competitive to the Products. Remarketer/Integrator may price Products as it sees fit. Appointment of Remarketer/Integrator as a "Dell Authorized Remarketer/Integrator" is not exclusive in any way. Dell retains the unfettered right to change distribution channels, add and terminate other resellers, value added resellers and distributors. Dell is free to sell to and accept orders from anyone, including Remarketer/Integrator's customers. Contract Term, Termination: This Agreement is in effect starting on the Commencement Date and continues in effect for one (1) year. At the end of the year, it will renew automatically for additional one year terms. Either party may terminate this Agreement at any time on at least thirty (30) days prior written notice to the other. Unless a payment is late or Remarketer/Integrator is in breach of a material provision of this Agreement at the time notice of termination is given, Dell will receive and accept orders in accordance with this Agreement up to the date of termination. Termination of this Agreement, regardless of the reason, will not affect the rights and obligations of the parties with respect to orders accepted prior to termination and the Products sold thereunder. Dell and Remarketer/Integrator accept the risk of termination by the other. On termination, neither party will have any claim against the other for the investment it may have made in the relationship established hereunder or in anticipation of the sales and other revenue to be gained because of it. Remarketer/Integrator Responsibilities: Remarketer/Integrator will exert its best efforts to market the Products. Remarketer/Integrator will provide Dell with the information Dell requests concerning the end users acquiring the Dell systems Remarketer/Integrator remarkets. Remarketer/Integrator will provide this information for each Dell system remarketed as soon as Remarketer/Integrator has identified the end user. Remarketer/Integrator will maintain a list of end users that have Products sold 2
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by Dell to Remarketer/Integrator other than Dell systems, and will permit Dell to use it to notify them concerning the Products if Dell needs to notify users of such a Product generally. Remarketer/Integrator agrees that Dell may treat Remarketer/Integrator's failure to comply with this paragraph as a material breach of this Agreement. Remarketer/Integrator will provide its customers with the Product warranty statements, registration cards, software license agreements and other materials included with the Products at the time of delivery. Remarketer/Integrator will provide Dell with written notice of any material change in the information provided to Dell as part of applying for appointment as a Dell Authorized Remarketer/Integrator, including Remarketer/Integrator's plans for marketing Products as part of Remarketer/Integrator's value added offerings. Material changes include any change in the ownership of Remarketer/Integrator or a material change in any credit information and references contained in the Application. This notice is to be provided as soon as possible and must be provided within five (5) working days of any such change. On Dell's request, Remarketer/Integrator agrees to provide Dell with an accurate and complete written list of liens, security interests and other encumbrances on Remarketer/Integrator's assets which could affect Remarketer/Integrator's compliance with this Agreement. After providing it, Remarketer/Integrator will promptly notify Dell of any material change to this information in accordance with the previous paragraph. Remarketer/Integrator will conduct business in an ethical manner and will obey all applicable laws and regulations. Remarketer/Integrator will factually present the capabilities, function, and performance of Products. Remarketer/Integrator may not export Products from the United States. Remarketer/Integrator will maintain Comprehensive General Liability (including Products Liability) insurance with at least $1 million in coverage and with an insurance company acceptable to Dell. Remarketer/Integrator will obtain certificates of such insurance and provide them to Dell, on request. If Dell separately requests, Remarketer/Integrator will name Dell as an additional insured, and ensure that Dell will be notified at least thirty (30) days prior to cancellation or termination of any policy. Dell may hold up shipment of Products pending compliance with such a request. Liaison: Remarketer/Integrator will appoint one full time employee to be its primary liaison with Dell concerning orders, shipments, invoices, payments and other non-technical issues. This primary liaison may appoint other liaison people, but Remarketer/Integrator will keep the number of liaisons to a minimum. Remarketer/Integrator will authorize liasons to handle such issues on Remarketer/Integrator's behalf. Orders: Remarketer/Integrator may place orders by telephone or in writing; written orders may be sent by facsimile. An order is accepted unless Dell rejects it. An order is not binding on Dell until Dell accepts it, and Dell is not obligated to accept an order. If Remarketer/Integrator requires confirmation that Dell will accept an order before it places the order, it must request a firm quotation in accordance with the section titled Quotations. Remarketer/Integrator may change or cancel without liability an order or any part of it at any time up until Dell begins manufacture of the affected Products. Remarketer/Integrator may change or cancel an order or any part of it after Dell begins manufacture of the affected Products, but Remarketer/Integrator agrees to pay Dell 4.2% of the prices for the affected Products as a fair estimate of Dell's costs of selling them to others. Prices: Prices are not firm until Dell has accepted an order. However, Dell will provide Remarketer/Integrator with two (2) weeks prior notice of price changes, if Dell accepts orders for Products within the two week period, the Products will be sold at the old prices. A separate charge for shipping and handling will be shown on Dell's invoice. Except for Dell's franchise taxes and taxes on Dell's net income, all sales and other taxes, however designated, are payable by Remarketer/Integrator. Such taxes, if due, will be shown separately. If Remarketer/Integrator provides Dell with a correct and valid tax exemption certificate or equivalent documentation, Dell will not invoice Remarketer/Integrator for the affected taxes. 3
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Quotations: Remarketer/Integrator may request from Dell a written quotation, good for ten (10) calendar days from the date of the request, offering to accept Remarketer/Integrator's firm order under this Agreement for certain Products in specific quantities at set prices. Dell's policy is to issue such quotations in response to requests that are in accord with Dell's then current product and pricing policies and plans, but Dell may refuse to issue any specific quotation. Dell will not quote specific delivery dates. Discounts: Products are classified by Dell. The discounts that apply to Remarketer/Integrator's purchases of Products are based on these classifications. Classification of Products is subject to change by Dell at any time. Dell will endeavor to provide Remarketer/Integrator with 30 days advance notice of changes to Product classifications. However, if Dell makes a reclassification effective sooner than 30 days from when Remarketer/Integrator receives notice, Remarketer/Integrator may, during the 30 day notice period, 1) consider affected Products as reclassified and apply any reduction that Dell may announce to their list prices, or 2) consider affected Products as remaining in their old classifications in which case Remarketer/Integrator forgoes the effect of any reduction in list prices which may occur during the notice period. The discounts that apply to Remarketer/Integrator's purchases of Products are also based an the end users to which Products are remarketed. The end user categories are set forth on the signature page of this Agreement. During each annual term, Dell will review quarterly the total dollar volume of orders, net of cancellations and returns, against the commitment stated. If the cumulative net dollar volume ordered, as a percentage of the commitment, does not equal or exceed the applicable value from the following table, Dell may, in its discretion, reduce the discounts to levels (including no discount) in accordance with its then current discount policy for the actual dollar volume of orders. Percentage Three-Month Period of Commitment ------------------ ------------- 1st 2O% 2nd 45% 3rd 70% 4th 100% Dell will discuss at any time with Remarketer/Integrator adjustment of the commitment and applicable discounts, based on revision of Remarketer/Integrator's forecasted purchases, but any adjustment requires Dell's prior written consent. For contract terms after the first year, Dell and Remarketer/Integrator will agree on the applicable discounts. Remarketer/Integrator may not assume any discounts will be continued for a subsequent term. Payment: Dell's payment terms are Net 30 days from date of invoice. They are subject to change at any time by Dell, and Dell may change them without prior notice. Remarketer/Integrator agrees to confirm Dell's security interest in Products delivered but not paid for, as Dell may request. Dell may invoice parts of an order separately; Remarketer/Integrator will treat each invoice as a separate transaction, and pay it accordingly. If a payment due from Remarketer/Integrator is late and not because it is disputed in good faith, Dell may, in its discretion, refuse to ship Products until the late payment is made. At Remarketer/Integrator's request, Dell will ship COD directly to Remarketer/Integrator's end user customer. The amount due will be the list prices for the Products. If Dell receives payment in full, Dell will pay or credit Remarketer/Integrator with the value of the applicable discount. If the end user refuses delivery, Remarketer/Integrator will pay Dell 4.2% of the full amount due for the Products, to cover Dell's cost of shipping the Products and having them returned. If the Products are accepted by the end user but the payment is not good, Remarketer/Integrator will pay for the Products, including any COD charges. Products: Dell's policy is one of on-going product update and revision. Dell may revise and discontinue Products at any time. Dell will endeavor to provide Remarketer/Integrator with advance notice of Product changes, but Dell makes no commitment in this regard. While there may be differences in detail, Dell will ship Products that have the functionality and performance of the products ordered. Changes between what is shipped and what is described in a specification sheet or catalog are possible. The parts and assemblies used in 4
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building the Products are selected from new and equivalent to new parts and assemblies in accordance with industry practices. Spare parts are refurbished if necessary, tested, and equivalent to new. Delivery; Title and Risk of Loss: All ship dates are Dell's estimates. Many factors, including supply of parts and assemblies, affect Dell's production scheduling. Dell's normal policy is to schedule production based on when orders arc accepted. Dell will ship to Remarketer/Integrator or its end user customer as Remarketer/Integrator may direct. Dell is responsible for loss or damage that occurs during shipping. Title to Products passes from Dell to the recipient on delivery to the carrier at Dell's facility. "Total Satisfaction Return Policy": Remarketer/Integrator agrees that Dell's policy of accepting Products for refund within the first 30 days of use is not available to Remarketer/Integrator or its end users. Remarketer/Integrator will inform its end users of this fact by the time they receive Products. Limited Wamnties: Dell warrants that the hardware Products it sells will conform to the specifications current when the Product is shipped. Dell warrants that spare parts will be interchangeable with the parts they are to replace, and will conform to the specifications current when they are shipped. The warranty term for spare parts is ninety (90) days from the date of delivery. Dell warrants that its computers and peripherals will function as parts of an IBM PC-AT or EISA architecture system. Dell warrants that its computers and peripherals will run widely used application software written for equivalent systems when the application software functions correctly on several widely used, equivalent IBM PC-AT or EISA architecture systems. The warranty term for each hardware Product is stated in Schedule B, Warranties, attached hereto. Dell will issue revisions to this schedule as it revises its standard warranties from time to time; a revision is effective on the date stated thereon and applies to orders placed and accepted on or after that date. If the manufacturer of an accessory offers a longer warranty than Dell's then current term, Dell will cooperate with the user in connection with claims under the manufacturer's warranty. Dell's hardware warranties do not cover damage due to external causes, including accident, problems with electrical power, servicing not authorized by Dell, usage not in accordance with Product specifications and instructions, failure to perform preventive maintenance, abuse and misuse. Except for the compatibility warranty set forth above, Dell does not warrant that Products, when used, will function in any specific configuration that includes hardware or software not provided by Dell or will function to produce a particular result, even if the specific configuration or the result has been discussed with Dell people. Remarketer/Integrator will evaluate for itself that the Products it remarkets will function properly as part of its value added offerings. The start of the one-year warranty period for each system remarketed by Remarketer/Integrator is the date the system is placed in service with the end user or 60 days from the date the system is shipped from Dell's facility, whichever occurs first. Dell will handle warranty claims in accordance with the applicable version of Schedule B. Dell owns all parts removed from repaired Products and all returned spare parts. Dell uses new and reconditioned parts made by various manufacturers in performing warranty repairs and building replacement Products. The warranty term on repaired and replaced products is the remainder of the original term or 60 days, whichever is longer. DELL MAKES NO EXPRESS WARRANTIES EXCEPT THOSE STATED IN THIS SECTION AND THE THEN CURRENT VERSION OF SCHEDULE B. DELL DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 5
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DELL'S RESPONSIBILITY FOR WARRANTY CLAIMS IS LIMITED TO REPAIR AND REPLACEMENT AS SET FORTH IN THIS SECTION AND THE THEN CURRENT VERSION OF SCHEDULE B. On-site Service Contracts: Remarketer/Integrator may contract for on-site service as Dell may market service contracts to its customers. Any on-site service acquired by Remarketer/Integrator may be transferred to Remarketer/Integrator's customers in accordance with the applicable service contract. If such a transfer is accomplished within sixty (60) days of the date the Products covered were shipped from Dell's facility, the transferee will have a full twelve months of on-site service coverage. Product and Technical Support: Remarketer/Integrator agrees that it will establish and maintain support services for its customers. Dell will accept requests for support from Remarketer/Integrator's customers when Remarketer/Integrator is unable to handle them. Dell will accept from Remarketer/Integrator requests for support that are unusual, new to Remarketer/Integrator, and not of a general nature. Dell promises that its support people will attempt to handle over the telephone any such request. However, Dell's support people may not be able to understand or resolve a particular problem. Infringement of Third Party Rights: Dell will indemnify and hold Remarketer/Integrator harmless from a claim that a hardware Product or accessory, or its use, infringes on another person or company's patent, copyright, trade secret or other intellectual property rights in the United States. This indemnity is limited to use of hardware and accessories sold by Dell by themselves or with operating system software provided by Dell only; use with other products or software, including that which Remarketer/Integrator incorporates in its offerings, is not covered. If a person or company makes such a claim, Dell will resolve it in a way that permits continued ownership and use of the Product, or Dell will provide a replacement at no cost, or Dell will accept return of the Product, freight collect, and provide a full refund. This section is the exclusive statement of Dell's liability and responsibility with respect to infingement of intellectual property rights. Software: All software, including MS-DOS and Microsoft Windows, is provided subject to the license agreement that is part of the package. Remarketer/Integrator agrees that it will be bound by the license agreement once the package is opened or its seal is broken. Dell does not warrant any software under this Agreement. All software is warranted in accordance with the license agreement that governs its purchase and use. Applications and other software packages that are purchased by Dell from other companies for resale are warranted by the companies that publish them and not by Dell. Indemnification: If Dell is notified promptly in writing and given sole control of the defense and all related settlement negotiations, it will take responsibility for any claim based on an allegation that a Product did not meet Dell's warranty when received by an end user, or that Dell failed on request to provide warranty service in accordance with the applicable warranty statement, or otherwise alleging Dell fault with respect to Products. Dell will pay any resulting costs and damages finally awarded against Remarketer/Integrator with regard to any such claim if and to the extent that they are grounded on Dell's fault and do not exceed costs or damages that would have been finally awarded against Dell had the claim been made directly against Dell. Remarketer/Integrator agrees to indemnify and hold Dell harmless from any and all damages, costs and expense in connection with any claim by anyone that arises out of Remarketer/Integrator's acts (other than marketing Products in compliance with this Agreement and all applicable instructions given by Dell), omissions or misrepresentations, regardless of the form of action. Limitation of Remedies and Liability: In the event of the failure or threatened failure of either party to fulfill any obligation, the remedy of the other party is to request that the obligation be fulfilled. If that does not occur promptly and within thirty (30) days, the other party may terminate this Agreement and, if appropriate, bring an action for moneys due or to seek enforcement of its rights at law or in equity. NEITHER PARTY HAS ANY LIABILITY TO THE OTHER FOR LOST PROFITS, LOSS OF BUSINESS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AGREEMENT. 6
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However, this limitation does not apply to awards made on suits or proceedings within the scope of the indemnity provided in the Infringement section, or to claims within the scope of the Indemnification section, or to claims for bodily injury or damage to real or tangible personal property caused by the negligence of employees or representatives of Dell or Remarketer/Integrator. Trademarks; Advertising: Remarketer/Integrator may refer to itself during the term of this Agreement as a "Dell Authorized Remarketer/Integrator" but only in connection with Products. Remarketer/Integrator may use Dell's trademarks and trade names to market Products. Remarketer/Integrator agrees to change or correct, at Remarketer/Integrator's expense, any material or activity which Dell, in its sole judgment, decides is inaccurate, objectionable, misleading or a misuse of Dell trademarks or trade names. Remarketer/Integrator will provide Dell with proof copies of all advertising and other publicity that refers to Dell or uses Dell trademarks or trade names in time for Dell to have at least five (5) business days to review the references to Dell and use of Dell marks and names. Remarketer/Integrator agrees to change or correct, at Remarketer/Integrator's expense, any advertising and other publicity which Dell, in its sole judgment, decides is inaccurate, objectionable, misleading or a misuse of Dell trademarks or trade names. Dell will communicate any such changes and corrections to Remarketer/Integrator within five (5) business days of receipt of the proof copies; Remarketer/Integrator may accept Dell's failure to communicate as Dell's consent for Remarketer/Integrator to use the advertising and publicity as submitted. Remarketer/Integrator receives no rights to use Dell trademarks and trade names except as provided in this section. The limited rights granted herein end with termination of this Agreement. Confidential Information: Confidential Information is all confidential and proprietary information so designated in writing or verbally by the words "Confidential", "Proprietary" or similar. A party receiving Confidential Information will keep the information in confidence and not disclose it to others, including, for Remarketer/Integrator, its customers, except as the disclosing party may expressly authorize. For this paragraph, Dell includes Dell Computer Corporation and its subsidiaries. Miscellaneous: Remarketer/Integrator may not assign this Agreement without Dell's prior written consent, which Dell will not unreasonably withhold or delay. Dell may assign this Agreement, on notice to Remarketer/Integrator, to any entity owned or controlled by Dell Computer Corporation, Dell's parent. Dell and Remarketer/Integrator are independent contractors. Neither party will state, imply or knowingly permit anyone, including Remarketer/Integrator's customers, to infer that any other relationship exists between the parties without the other party's prior written consent. This Agreement shall be governed by Texas law. Notices from one party to the other will be sent to the address shown on the signature page. Notices to Dell will be directed to its Contracts Manager. Notices to Remarketer/Integrator will be directed to its then current primary liaison. If any provision of this Agreement is void or unenforceable, the parties agree to delete it and agree that the remainder of this Agreement will continue to be in effect. Further, if either party believes this Agreement may be deemed a franchise contract, or that the relationship established hereunder may be deemed to be that of franchiser and franchisee, the parties agree to amend this Agreement as necessary to avoid the possibility of such a construction. This Agreement is the exclusive statement of the contract in effect between Dell and Remarketer/Integrator. Preprinted terms and all other terms not requested herein on any purchase order or other document submitted by Remarketer/Integrator are of no force or effect unless expressly accepted by Dell in writing. 7
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SCHEDULE B -- WARRANTS ---------------------- The Following One-Year Limited Warranty Is Applicable to Certain Dell Products As Designated By Dell Warranty Policy Effective Date: November 1, 1990. (U.S. Only) Warranty Terms For Dell systems and peripherals, the warranty term is one (1) year. For accessories and spare parts, the warranty term is ninety (90) days. Warranty Claims Dell will repair or replace products returned to Dell's facility. To request warranty service, Dell must be contacted within the warranty period. If Dell decides a product requires service, Dell will issue a Return Material Authorization Number. Products must be shipped back to Dell in their original packaging or equivalent, shipping charges prepaid. Risk of loss during shipping to Dell is the sender's responsibility. Dell will ship the repaired or replacement products freight prepaid. Note This Schedule applies to Dell's return-to-factory warranty only. For the provisions relating to on-site service, see On-site Service Contracts in Schedule A and the terms of any applicable service contract. The Following Three-Year Limited Warranty Is Applicable To Certain Dell Products As Designated by Dell Warranty Policy Effective Date: May 2, 1994 (U.S. Only) Dell Computer Corporation ("Dell") manufactures its hardware products from parts and components that are new or equivalent to new in accordance with industry-standard practices. Dell warrants that the hardware products it sells will be free from defects in materials and workmanship. The warranty term is three years beginning on the date of delivery, as further described below. Damage due to shipping the products to you is covered under this warranty. Otherwise, this warranty does not cover damage due to external causes, including accident, problems with electrical power, servicing not authorized by Dell, usage not in accordance with product instructions, failure to perform required preventive maintenance, abuse, and misuse. Limited Warranty Coverage During Year 1 --------------------------------------- During the one year period beginning on the date of delivery, Dell will repair or replace products returned to Dell's facility. To request warranty service, you must call Dell within the warranty period. Refer to your user documentation to find the appropriate telephone number for customer assistance. If warranty service is required, Dell will issue a Return Material Authorization Number. You must ship the products back to Dell in their original packaging or equivalent, prepay shipping charges, and you must insure the shipment or accept the risk of loss or damage during shipment. Dell will ship the repaired or replacement products to you freight prepaid if you use an address in the United States (excluding Puerto Rico and U.S. possessions). Shipments to other locations will be made freight collect. 8
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NOTE: Before you ship the product to Dell, back up the data on the hard-disk drive(s) and any other storage device(s) in the product. Remove any removable media, such as diskettes or PC cards. If you have any questions, call Dell for technical assistance. Dell owns all parts removed from repaired products. Dell uses new and reconditioned parts made by various manufacturers in performing warranty repairs and building replacement products. If Dell repairs a product, its warranty term is not extended; if Dell replaces a product, the replacement is warranted for the remainder of the original term or 60 days, whichever is longer. Limited Warranty Coverage During Years 2 and 3 ---------------------------------------------- During the second and third years of this limited warranty, Dell will provide on an exchange basis replacement parts for the Dell hardware product covered under this limited warranty when a part requires replacement. You must report each instance of hardware failure to Dell technical support in advance to obtain Dell's concurrence that a part should be replaced and to have Dell ship the replacement part. Dell will ship parts using next business day delivery, shipping prepaid if you use an address in the United States (excluding Puerto Rico and U.S. possessions). Shipments to other locations will be made freight collect. Dell will include a prepaid shipping container with each part for your use in returning the replaced part to Dell. Spare parts are new or reconditioned. Dell may provide spare parts made by various manufacturers when supplying parts to you. The warranty term for a replaced part is the remainder of the limited warranty term. You will pay Dell for replacement parts when the replaced part is not returned to Dell within 30 days of the date the replacement was shipped by Dell, and for parts used to repair systems not covered by this limited warranty. Parts will be priced at Dell's then-current standard prices. Payment terms are net 30 days from date of invoice. You accept full responsibility for your software and data. Dell is not required to advise or remind you of appropriate backup and other procedures. General ------- DELL MAKES NO EXPRESS WARRANTIES BEYOND THOSE STATED HERE. DELL DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SOME STATES DO NOT ALLOW LIMITATIONS ON IMPLIED WARRANTIES, SO THIS LIMITATION MAY NOT APPLY TO YOU. DELL'S RESPONSIBILITY FOR MALFUNCTIONS AND DEFECTS IN HARDWARE IS LIMITED TO REPAIR AND REPLACEMENT AS SET FORTH ABOVE. THESE WARRANTIES GIVE YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE. DELL DOES NOT ACCEPT LIABILITY BEYOND THE REMEDIES SET FORTH IN THIS WARRANTY STATEMENT OR LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR PRODUCTS NOT BEING AVAILABLE FOR USE OR FOR LOST DATA OR SOFTWARE. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE EXCLUSION OR LIMITATION MAY NOT APPLY TO YOU. These provisions apply to Dell's return-to-factory warranty only. For provisions of any on-site service contract covering your system, refer to the separate on-site service contract that you will receive. If you chose one of the available options instead of the basic Three Year Limited Warranty described above, the option you chose will be listed on your invoice. Note ---- This Schedule applies to Dell's return-to-factory warranty only. For the provisions relating to on-site service, see the section titled On-site Service in Schedule A and the terms of any applicable service contract. 9

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